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Rural Land Transfer and Financial Impact: Evidence from China

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  • Jiang, Meishan
  • Paudel, Krishna
  • Mi, Yunsheng

Abstract

Land is the most valuable capital that farmers own. Land transfer can improve income of farmers through an optimal allocation of factors of production. The land transfer is not only transferring of the ownership but also transferring of the management rights. Chinese rural land system has its unique characteristics: ownership, contract, and management rights. Ownership rights are owned by collectives, farmers have contract management rights which are divided into management transfer rights and contract rights. Since 2008, farmers are provided with both land contract rights and land management transfer rights. This reform has provided farmers with financial opportunities to obtain revenues using different channels. Transferring-in land needs additional capital thereby causing demand effects, but transferring-out land allows farmers to earn income thereby causing supply effects. Land transfer also changes farmer’s agricultural investment and insurance behavior. This paper uses 2014 data from nine Chinese provinces to test farmers’ financial behavior change between land management rights transfer-out and transfer-in. Results from doubly-robust estimator with inverse probability weighting estimator, regression-adjustment, and propensity score matching indicate a significant difference of financial selection between land transfer-in farmers and land transfer-out farmers. Land market gives an unblocked transmission channel to rural financial market through mechanism innovation.

Suggested Citation

  • Jiang, Meishan & Paudel, Krishna & Mi, Yunsheng, 2017. "Rural Land Transfer and Financial Impact: Evidence from China," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252853, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea17:252853
    DOI: 10.22004/ag.econ.252853
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    References listed on IDEAS

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