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Endowments, Technology, and Factor Markets: A Natural Experiment of Induced Institutional Innovation from China's Rural Reform

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  • Justin Yifu Lin

    (UCLA)

Abstract

The induced institutional innovation hypothesis postulates that new institutions are innovated to exploit profitable opportunities arising from institutional disequilibrium. The removal of legal restrictions on factor market exchanges after recent reforms in China resulted in institutional disequilibrium. This paper utilizes data from a household survey in China to explore (i) the relationship between the emergence of land, labor, and rental markets in a region and the distribution of factor endowments across rural households in that region, and (ii) the impact of hybrid rice on the emergence of factor markets in that region. The results are consistent with the induced institutional innovation hypothesis.
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Suggested Citation

  • Justin Yifu Lin, 1993. "Endowments, Technology, and Factor Markets: A Natural Experiment of Induced Institutional Innovation from China's Rural Reform," UCLA Economics Working Papers 689, UCLA Department of Economics.
    • Handle: RePEc:cla:uclawp:689
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    1. Beekman, Gonne & Bulte, Erwin H., 2012. "Social norms, tenure security and soil conservation: Evidence from Burundi," Agricultural Systems, Elsevier, vol. 108(C), pages 50-63.
    2. Tong, Haizhi, 2002. "Chinese Regional Agricultural Productivity In The 1990'S," 2002 Annual meeting, July 28-31, Long Beach, CA 19804, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Wang, Can & Deng, Mengzhi & Deng, Junfeng, 2020. "Factor reallocation and structural transformation implications of grain subsidies in China," Journal of Asian Economics, Elsevier, vol. 71(C).
    4. Hongyun Han & Shu Wu, 2018. "Structural Change and Its Impact on the Energy Intensity of Agricultural Sector in China," Sustainability, MDPI, vol. 10(12), pages 1-23, December.
    5. Nell, Wilhelm T. & Schwalbach, L., 2002. "Adoption of Veterinary Technologies Amongst Sheep and Goat Farmers in Qwawqa, South Africa," 13th Congress, Wageningen, The Netherlands, July 7-12, 2002 6974, International Farm Management Association.
    6. Haizhi Tong & Lilyan E. Fulginiti, 2005. "Chinese Regional Agricultural Productivity in the 1990'a," Others 0502012, University Library of Munich, Germany.
    7. Ke Li & Shuntian Yao & Lei Yu, 2009. "Community Property Auction, Nash Bidding Rule And China'S Rural Economic Reform," Pacific Economic Review, Wiley Blackwell, vol. 14(5), pages 682-693, December.
    8. Kazianga, Harounan & Masters, William A. & McMillan, Margaret S., 2014. "Disease control, demographic change and institutional development in Africa," Journal of Development Economics, Elsevier, vol. 110(C), pages 313-326.
    9. Gong, Binlei, 2018. "Agricultural reforms and production in China: Changes in provincial production function and productivity in 1978–2015," Journal of Development Economics, Elsevier, vol. 132(C), pages 18-31.
    10. Hameeda A. AlMalki & Christopher M. Durugbo, 2023. "Systematic review of institutional innovation literature: towards a multi-level management model," Management Review Quarterly, Springer, vol. 73(2), pages 731-785, June.
    11. Binoy Goswami, 2016. "Overcoming farm size induced constraints through endogenous institutional innovations: findings from a field study in Assam plains, India," Economics Bulletin, AccessEcon, vol. 36(1), pages 411-428.
    12. Wu, Shunxiang & Walker, David J. & Devadoss, Stephen, 1998. "Productivity Growth And Its Components In Chinese Agriculture After Reforms," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20817, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. David K. Lambert & Elliott Parker, 1998. "Productivity in Chinese Provincial Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(3), pages 378-392, September.

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