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Impact of land tenure policy on agricultural investments in China: Evidence from a panel data study

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  • Gao, Liangliang
  • Sun, Dingqiang
  • Huang, Jikun

Abstract

The goal of this paper is to examine the impact of changes in China's rural land policy on agricultural investments. Dramatic changes occurred in China's rural land policies after 2000, including the extension of rural land contractual period, restriction of land reallocation among villages and villagers groups, elimination of agricultural taxes for responsibility land, and rapid development of rural land rental markets. These changes have given farmers more secure tenure on collectively controlled responsibility land and have strengthened farmers' income rights for responsibility lands, incentivizing them to increase their investments on responsibility lands. A panel data method was used to quantitatively investigate the impact of land policy changes on agricultural investment. We considered the application of organic fertilizer as an indicator for long-term agricultural investment, and compared the use of organic fertilizer between private plots and responsibility lands operated by the same household. The results showed that the difference in organic fertilizer use between private plots and responsibility land for the same household has become smaller from 2000 to 2008. Our findings suggest that recent changes in rural land policies have provided farmers incentives to increase land quality investment on their responsibility lands.

Suggested Citation

  • Gao, Liangliang & Sun, Dingqiang & Huang, Jikun, 2017. "Impact of land tenure policy on agricultural investments in China: Evidence from a panel data study," China Economic Review, Elsevier, vol. 45(C), pages 244-252.
    • Handle: RePEc:eee:chieco:v:45:y:2017:i:c:p:244-252
    DOI: 10.1016/j.chieco.2017.07.005
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    Cited by:

    1. Le, Kien, 2020. "Land use restrictions, misallocation in agriculture, and aggregate productivity in Vietnam," Journal of Development Economics, Elsevier, vol. 145(C).
    2. Keming Huang & Fangzhou Xia, 2023. "Classification of Rural Relative Poverty Groups and Measurement of the Influence of Land Elements: A Questionnaire-Based Analysis of 23 Poor Counties in China," Land, MDPI, vol. 12(4), pages 1-23, April.
    3. Qiangqiang Zhang & Jiaying Tian & Jie Zheng & Nazir Muhammad Abdullahi & Xuexi Huo, 2022. "How Does Land Tenure Security Affect Farm Succession? Evidence from Apple Growers in China," Land, MDPI, vol. 11(7), pages 1-13, July.
    4. Blackman, Allen & Dissanayake, Sahan & Martinez Cruz, Adan & Corral, Leonardo & Schling, Maja, 2022. "Benefits of Titling Indigenous Communities in the Peruvian Amazon: A Stated Preference Approach," IDB Publications (Working Papers) 12633, Inter-American Development Bank.
    5. Lijing Zhang & Mingyong Hong & Xiaolin Guo & Wenrong Qian, 2022. "How Does Land Rental Affect Agricultural Labor Productivity? An Empirical Study in Rural China," Land, MDPI, vol. 11(5), pages 1-19, April.
    6. Choi, Jiseon & Jodlowski, Margaret C., 2022. "Tenure Status and Land Investment in South Korea," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322476, Agricultural and Applied Economics Association.
    7. Hong, Weijie & Luo, Biliang & Hu, Xinyan, 2020. "Land titling, land reallocation experience, and investment incentives: Evidence from rural China," Land Use Policy, Elsevier, vol. 90(C).
    8. Xiaonan Zhao & Feng Lan, 2023. "The Impact of Livelihood Capital Endowment on Household Poverty Alleviation: The Mediating Effect of Land Transfer," Land, MDPI, vol. 12(7), pages 1-17, July.
    9. Shangan Ke & Yueqi Wu & Haiying Cui & Xinhai Lu & Danling Chen, 2022. "Farmland Transfer, Social Security, and Households’ Productive Investment: Based on China’s CFPS Survey," IJERPH, MDPI, vol. 19(17), pages 1-12, September.
    10. Bo Li & Ruimei Wang & Quan Lu, 2021. "Land Tenure and Cotton Farmers’ Land Improvement: Evidence from State-Owned Farms in Xinjiang, China," IJERPH, MDPI, vol. 19(1), pages 1-20, December.
    11. Muhammad Waqar Akram & Nida Akram & Wang Hongshu & Shahla Andleeb & Khalil ur Rehman & Umair Kashif & Ayesha Mehmood, 2019. "Impact of Land Use Rights on the Investment and Efficiency of Organic Farming," Sustainability, MDPI, vol. 11(24), pages 1-18, December.
    12. Qian, Chen & Antonides, Gerrit & Heerink, Nico & Zhu, Xueqin & Ma, Xianlei, 2022. "An economic-psychological perspective on perceived land tenure security: Evidence from rural eastern China," Land Use Policy, Elsevier, vol. 120(C).
    13. Li, Bowei & Shen, Yueqin, 2021. "Effects of land transfer quality on the application of organic fertilizer by large-scale farmers in China," Land Use Policy, Elsevier, vol. 100(C).
    14. Yang, Zhiyuan & Zhu, Yuemei & Zhang, Jinyue & Li, Xuyi & Ma, Peng & Sun, Jiawei & Sun, Yongjian & Ma, Jun & Li, Na, 2022. "Comparison of energy use between fully mechanized and semi-mechanized rice production in Southwest China," Energy, Elsevier, vol. 245(C).
    15. Adewale Henry Adenuga & Claire Jack & Ronan McCarry, 2023. "Investigating the Factors Influencing the Intention to Adopt Long-Term Land Leasing in Northern Ireland," Land, MDPI, vol. 12(3), pages 1-18, March.
    16. Adewale Henry Adenuga & Claire Jack & Ronan McCarry, 2021. "The Case for Long-Term Land Leasing: A Review of the Empirical Literature," Land, MDPI, vol. 10(3), pages 1-21, March.
    17. Li, Chengyou & Jiao, Yong & Sun, Tao & Liu, Anran, 2021. "Alleviating multi-dimensional poverty through land transfer: Evidence from poverty-stricken villages in China," China Economic Review, Elsevier, vol. 69(C).
    18. Jing Li, 2019. "Land tenure and agricultural investments in China: a meta-regression analysis," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 12(2), pages 329-347, September.
    19. Chaozhu Li & Xiaoliang Li & Jiaxu Wang & Tianchu Feng, 2023. "Impacts of Aging Agricultural Labor Force on Land Transfer: An Empirical Analysis Based on the China Family Panel Studies," Land, MDPI, vol. 12(2), pages 1-15, January.
    20. Hongbin Liu & Xiaojuan Luo, 2018. "Understanding Farmers’ Perceptions and Behaviors towards Farmland Quality Change in Northeast China: A Structural Equation Modeling Approach," Sustainability, MDPI, vol. 10(9), pages 1-17, September.
    21. Liangliang Gao & Dingqiang Sun & Cuiping Ma, 2019. "The Impact of Farmland Transfers on Agricultural Investment in China: A Perspective of Transaction Cost Economics," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 27(1), pages 93-109, January.
    22. Bowei Li & Qiyan Zeng, 2022. "The Effect of Land Right Stability on the Application of Fertilizer Reduction Technologies—Evidence from Large-Scale Farmers in China," Sustainability, MDPI, vol. 14(13), pages 1-13, July.
    23. Shuangjin Wang & Yuan Tian & Xiaowei Liu & Maggie Foley, 2019. "How Farmers Make Investment Decisions: Evidence from a Farmer Survey in China," Sustainability, MDPI, vol. 12(1), pages 1-19, December.
    24. Zhou, Nan & Cheng, Wenli & Zhang, Longyao, 2022. "Land rights and investment incentives: Evidence from China’s Latest Rural Land Titling Program," Land Use Policy, Elsevier, vol. 117(C).
    25. Xianqing Ji & Shouying Liu & Jianan Yan & Youyi Li, 2021. "Does Security of Land Operational Rights Matter for the Improvement of Agricultural Production Efficiency under the Collective Ownership in China?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 29(1), pages 87-108, January.

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