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Performance Environment, Contract Binding, and the Contract Structure of the Farmland Transfer Market

Author

Listed:
  • Yang Guo

    (School of Management, Jiangsu University, No. 301 Xuefu Road, Zhenjiang 212013, China)

  • Meiling Cui

    (School of Finance and Economics, Jiangsu University, No. 301 Xuefu Road, Zhenjiang 212013, China)

  • Zhigang Xu

    (School of Economics and Management, Nanjing Agriculture University, No. 1 Weigang Road, Nanjing 210095, China)

Abstract

This study discusses the mechanism of social trust and legal institutions and their impact on farmers’ contract selection in the farmland transfer market from the perspective of contract governance. Using data from a survey of 128 villages in Heilongjiang, Henan, Zhejiang, and Sichuan provinces, this study empirically tests the impact of social trust and legal institutions on the binding force of contracts, and the proportions of paper and long-term contracts in the farmland transfer market. The results showcase, first, that improvement in social trust and legal institutions can strengthen the binding force of farmland contracts. The strength of legal institutions, as embodied in regulation files and execution, and of social trust, as embodied in village neighborhood relations and loan relations, have significant positive impacts on the binding force of contracts in the farmland transfer market. Second, the binding force of contracts positively impacts both paper and long-term contracts in the farmland transfer market. Whether contract execution or dispute resolution rates are selected as the proxy variables for the binding force of contracts, the stronger the contract binding force, the higher the proportion of both paper and long-term contracts in the farmland transfer market. Therefore, improving formal and informal social systems to enhance contractual binding force is of great importance in standardizing contracts and improving the efficiency of market resource allocation.

Suggested Citation

  • 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.
    • Handle: RePEc:gam:jlands:v:12:y:2023:i:8:p:1582-:d:1215047
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    References listed on IDEAS

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    Cited by:

    1. Haijiang Chen & Hong-Wai Ho & Chunli Ji & Haoqing Zheng & Songlin Zhang, 2024. "Spatiotemporal evolution and driving factors of agricultural land transfer in China," PLOS ONE, Public Library of Science, vol. 19(9), pages 1-23, September.
    2. Bachev, Hrabrin, 2025. "Структура На Договорите И Гавърнанса В Българските Ферми [Structure of contracts and governance of Bulgarian farms]," MPRA Paper 123372, University Library of Munich, Germany.
    3. Lan Pan & Haoran Wan & Xufeng Cui, 2024. "Exploring the Impact of Land Certification on Centralized Transfer in Rural China: The Roles of Timing, Inequality, and Governance," Land, MDPI, vol. 13(12), pages 1-24, November.
    4. Bachev, Hrabrin, 2025. "Управление На Снабдяването Със Земя И Води В Българските Ферми [Management of land and water supply in Bulgarian farms]," MPRA Paper 123371, University Library of Munich, Germany.
    5. Rao, Fangping & Wu, Ke & Dai, Xiaoqing & Zhang, Lifang, 2024. "Institution and land transfer contract stability: Evidence from Jiangxi, Jiangsu and Liaoning provinces in rural China," Finance Research Letters, Elsevier, vol. 69(PA).
    6. Yaoben Lin & Xuewen Wang & Guangyu Li & Wei Shen, 2024. "Green and Low Carbon Development Performance in Farmland Use Regulation: A Case Study of Liyang City, China," Land, MDPI, vol. 13(9), pages 1-17, August.

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