Abstract Although agricultural irrigation technology in China has been steadily improved for decades, the realized water conservation in the agricultural sector is not as good as expected. This paper examines whether water rights trading can encourage agricultural water conservation through technology improvement. Our fixed effects model specification confirms that water rights trading has a moderation effect on agricultural water conservation via technology improvement. We further identify that the moderation effect is driven by two forces which we label as the “revenue-driven” effect and “industrial water pressure-driven” effect. In general, the revenue effect drives farmers to improve the technology. However, the pressure from industrial water demand has more pronounced effects than the revenue-driven channel. Under the dual pressure of high industrial water consumption and low water endowment, farmers tend actively promote irrigation technology and reduce agricultural water use even if there is no revenue-driven effects. In addition, this paper reveals the existence of bottleneck on the moderated technology improvement, due to the reduced capacity on water rights supply in the agricultural sector.

中文翻译：

---

水权交易是否鼓励技术进步和农业节水？

摘要 我国农业灌溉技术虽然经过几十年的稳步提升，但在农业领域实现的节水效果并不如预期。本文考察了水权交易是否可以通过技术改进来鼓励农业节水。我们的固定效应模型规范证实了水权交易通过技术改进对农业节水有调节作用。我们进一步确定调节效应是由两种力量驱动的，我们将其标记为“收入驱动”效应和“工业水压驱动”效应。一般来说，收入效应驱使农民改进技术。然而，工业用水的压力比收入驱动的渠道具有更明显的影响。在工业耗水量高和水资源禀赋低的双重压力下，即使没有收入驱动效应，农民也倾向于积极推广灌溉技术，减少农业用水。此外，本文揭示了由于农业部门水权供应能力下降，在适度技术改进方面存在瓶颈。