Cotton production makes an important contribution to the income of rural residents and the economy in Xinjiang province, which leads other provinces in terms of planted area, total production, and average yield of cotton in China. This study analyzed the competitiveness of cotton production in the study area using the efficiency advantage index (EAI), scale advantage index (SAI), and aggregated advantage index (AAI). Moreover, the factors influencing the productivity of cotton have been investigated by the use of ridge regression and correlation matrix using a dataset for the period 2005 to 2018. The results showed that cotton production had a large comparative advantage in Xinjiang from 2005 to 2018. The average of efficiency advantage index (EAI), scale advantage index (SAI), and aggregated advantage index (AAI) are 1.50, 12.96, and 4.35, respectively. Overall, Xinjiang cotton production has a higher planting scale advantage and productivity. By using ridge regression to calculate the impact of cotton production on agricultural output value in Xinjiang, the results showed that total cotton production, fiscal expenditure on agricultural support, total agricultural machinery power, and fertilizer use had significant positive effects, whereas cotton sown area, average cotton yield, and the proportion of affected area by insects and diseases had negative impact agricultural output value. The study implies the need for a implementing a well-thought and empirically backed plan to support cotton production based on comparative advantage for a specific area, building a cotton production standard system, reducing the cost of cotton production, and building a cotton risk-protection system to protect the interests of cotton farmers and promote the sustainable development of the cotton industry.