IDEAS home Printed from https://ideas.repec.org/a/gam/jlands/v11y2022i12p2138-d985442.html
   My bibliography  Save this article

Impact of Farmland Rental Contract Disputes on Farmland Rental Market Participation

Author

Listed:
  • Xingguang Li

    (School of Land Science and Technology, China University of Geosciences (Beijing), Beijing 100083, China)

  • Xuexi Huo

    (Center for Western Rural Development, College of Economics and Management, Northwest A&F University, Xianyang 712100, China)

Abstract

In the context of an ambiguous structure of farmland property rights, farmland rental contract disputes exhibited an upward tendency over the past decade, in practice, which damaged the expectations of land tenure security and, consequently, influenced the willingness of people to participate in farmland rental markets. Thus, the main aim of this paper was to analyze the impact of farmland rental contract disputes on farmland rental market participation, which was empirically tested by using a logit model, IV-probit model, and survey data for 762 apple growers. The results indicated that (1) farmland rental contract disputes significantly boosted the transfer of farmland to relatives and friends, (2) obtaining reasonable compensation in the process of solving farmland rental contract disputes significantly boosted farmland rental market participation for all types of objects of farmland transfers, and (3) farmland rental contract disputes significantly promoted farmers’ choice of relatives as the objects of farmland transfers. Participating in farmland rental markets was a freely pursued decision-making process, based on the actual situation, and farmers improved their expectations of the risks to farmland property rights by resorting to the reputation mechanism. However, obtaining reasonable compensation was conducive to reducing market segmentation and discrimination. Based on our analysis, the key factor in enhancing farmland rental market participation and reducing market segmentation was improving the stability of farmland property rights, and, in practice, farmland rental contract disputes should be reasonably reduced and regulated. This paper not only emphasizes the importance of solving farmland rental contract disputes reasonably, but also provides a reference for improving relevant laws and regulations on farmland transfers, which is conducive to developing farmland rental markets in the context of an ambiguous structure of farmland property rights in some developing countries.

Suggested Citation

  • Xingguang Li & Xuexi Huo, 2022. "Impact of Farmland Rental Contract Disputes on Farmland Rental Market Participation," Land, MDPI, vol. 11(12), pages 1-16, November.
    • Handle: RePEc:gam:jlands:v:11:y:2022:i:12:p:2138-:d:985442
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2073-445X/11/12/2138/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2073-445X/11/12/2138/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Deininger, Klaus & Songqing Jin & Adenew, Berhanu & Gebre-Selassie, Samuel & Demeke, Mulat, 2003. "Market and non-market transfers of land in Ethiopia - implications for efficiency, equity, and non-farm development," Policy Research Working Paper Series 2992, The World Bank.
    2. Jin, Songqing & Deininger, Klaus, 2009. "Land rental markets in the process of rural structural transformation: Productivity and equity impacts from China," Journal of Comparative Economics, Elsevier, vol. 37(4), pages 629-646, December.
    3. Cheng, Wenli & Xu, Yuyun & Zhou, Nan & He, Zaizhong & Zhang, Longyao, 2019. "How did land titling affect China’s rural land rental market? Size, composition and efficiency," Land Use Policy, Elsevier, vol. 82(C), pages 609-619.
    4. Oliver Hart & John Moore, 2008. "Contracts as Reference Points," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(1), pages 1-48.
    5. Li, Xingguang & Huo, Xuexi, 2021. "Impacts of land market policies on formal credit accessibility and agricultural net income: Evidence from China's apple growers," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    6. Amalavoyal Chari & Elaine M Liu & Shing-Yi Wang & Yongxiang Wang, 2021. "Property Rights, Land Misallocation, and Agricultural Efficiency in China [Misallocation, Selection and Productivity: A Quantitative Analysis with Panel Data from China]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(4), pages 1831-1862.
    7. Biliang Luo, 2018. "40-year reform of farmland institution in China: target, effort and the future," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 10(1), pages 16-35, February.
    8. Ernst Fehr & Oliver Hart & Christian Zehnder, 2011. "Contracts as Reference Points--Experimental Evidence," American Economic Review, American Economic Association, vol. 101(2), pages 493-525, April.
    9. Ernst Fehr & Oliver Hart & Christian Zehnder, 2008. "Contracts as reference points � experimental evidence," IEW - Working Papers 393, Institute for Empirical Research in Economics - University of Zurich.
    10. Ito, Junichi & Bao, Zongshun & Ni, Jing, 2016. "Land rental development via institutional innovation in rural Jiangsu, China," Food Policy, Elsevier, vol. 59(C), pages 1-11.
    11. Li, Xingguang & Liu, Jundi & Huo, Xuexi, 2021. "Impacts of tenure security and market-oriented allocation of farmland on agricultural productivity: Evidence from China’s apple growers," Land Use Policy, Elsevier, vol. 102(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yang Guo & Meiling Cui & Zhigang Xu, 2023. "Performance Environment, Contract Binding, and the Contract Structure of the Farmland Transfer Market," Land, MDPI, vol. 12(8), pages 1-17, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Xingguang & Huo, Xuexi, 2021. "Impacts of land market policies on formal credit accessibility and agricultural net income: Evidence from China's apple growers," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    2. Li, Xingguang & Liu, Jundi & Huo, Xuexi, 2021. "Impacts of tenure security and market-oriented allocation of farmland on agricultural productivity: Evidence from China’s apple growers," Land Use Policy, Elsevier, vol. 102(C).
    3. Baoling Zou & Biliang Luo, 2018. "Why the Uncertain Term Occurs in the Farmland Lease Market: Evidence from Rural China," Sustainability, MDPI, vol. 10(8), pages 1-15, August.
    4. Tongwei Qiu & Xinjie Shi & Biliang Luo, 2022. "Formalizing agricultural rentals in China: Does local public action help?," Development Policy Review, Overseas Development Institute, vol. 40(4), July.
    5. Schmitz, Patrick W., 2021. "On the optimality of outsourcing when vertical integration can mitigate information asymmetries," Economics Letters, Elsevier, vol. 202(C).
    6. Yutaka Suzuki, 2021. "Collusion, Shading, and Optimal Organization Design in a Three-tier Agency Model with a Continuum of Types," Annals of Economics and Finance, Society for AEF, vol. 22(2), pages 317-365, November.
    7. Fuxia Gao & Chuan Lin & Haomiao Zhai, 2022. "Digital Transformation, Corporate Innovation, and International Strategy: Empirical Evidence from Listed Companies in China," Sustainability, MDPI, vol. 14(13), pages 1-19, July.
    8. Anastasia Stepanova & Vladislav Savelyev & Malika Shaikhutdinova, 2018. "The Anchoring Effect in Mergers and Acquisitions: Evidence from an Emerging Market," HSE Working papers WP BRP 63/FE/2018, National Research University Higher School of Economics.
    9. von Siemens, Ferdinand A., 2009. "Bargaining under incomplete information, fairness, and the hold-up problem," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 486-494, August.
    10. Kim, Yoonha, 2021. "Linking theories of incomplete contracts to empirics in IPO contracting," Finance Research Letters, Elsevier, vol. 41(C).
    11. David C. Chan, 2018. "The Efficiency of Slacking off: Evidence From the Emergency Department," Econometrica, Econometric Society, vol. 86(3), pages 997-1030, May.
    12. Olivier Meier & Aurélie Sannajust, 0. "The smart contract revolution: a solution for the holdup problem?," Small Business Economics, Springer, vol. 0, pages 1-16.
    13. Maija Halonen-Akatwijuka & Oliver D. Hart, 2013. "More is Less: Why Parties May Deliberately Write Incomplete Contracts," NBER Working Papers 19001, National Bureau of Economic Research, Inc.
    14. David J. Cooper & Jordi Brandts, 2020. "Managerial Leadership, Truth-Telling, and Efficient Coordination," Working Papers 1211, Barcelona School of Economics.
    15. Hernán Bejarano & Brice Corgnet & Joaquín Gómez-Miñambres, 2019. "Labor Contracts, Gift-Exchange and Reference Wages: Your Gift Need Not Be Mine!," Working Papers 19-26, Chapman University, Economic Science Institute.
    16. Besir Ceka and Brian Burgo, 2014. "Discovering Cooperation: A Contractual Approach to Institutional Change in Regional International Organizations," EUI-RSCAS Working Papers p0388, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    17. Malmendier, Ulrike M. & Karsten, Christel & Sautner, Zacharias, 2020. "Lawyer Expertise and Contract Design – Evidence from M&A Negotiations," CEPR Discussion Papers 14936, C.E.P.R. Discussion Papers.
    18. Sudipto Bhattacharya & Sergei Guriev, 2013. "Control Rights Over Intellectual Property," Journal of Industrial Economics, Wiley Blackwell, vol. 61(3), pages 564-591, September.
    19. Luis Garicano & Luis Rayo, 2016. "Why Organizations Fail: Models and Cases," Journal of Economic Literature, American Economic Association, vol. 54(1), pages 137-192, March.
    20. Gesche, Tobias, 2018. "Reference Price Shifts and Customer Antagonism: Evidence from Reviews for Online Auctions," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181650, Verein für Socialpolitik / German Economic Association.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jlands:v:11:y:2022:i:12:p:2138-:d:985442. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.