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Institutional credibility and land investment: Evidence from new‐round land certification program in China

Author

Listed:
  • Hao Zhang
  • Guangcheng Ren
  • Shuyi Feng

Abstract

The article examines the impact of the credibility of land institutions on households' land investment in the context of the new‐round land certification program in China. Specifically, we first build a theoretical framework differentiating effects of households' perceived credibility regarding land use right, transfer right and mortgage right on investment. Then, a two‐step control function (2SCF) approach which controls for the endogeneity of households' perceived credibility is applied to the data collected from 487 households in Jiangsu province of China in 2017. Results show that households' perceived credibility of land transfer right has a significantly positive effect on both households' labor‐intensive and capital‐intensive investment. Credibility of land mortgage right has a significantly negative effect on households' capital‐intensive investment. However, credibility regarding land use right does not significantly affect households' land investment we focused on. Policies strengthening land transfer right credibility, improving land mortgage right and encouraging households to apply credits to farm activities, may play an important role in enhancing soil‐improving land investment.

Suggested Citation

  • Hao Zhang & Guangcheng Ren & Shuyi Feng, 2025. "Institutional credibility and land investment: Evidence from new‐round land certification program in China," Natural Resources Forum, Blackwell Publishing, vol. 49(3), pages 2225-2247, August.
    • Handle: RePEc:wly:natres:v:49:y:2025:i:3:p:2225-2247
    DOI: 10.1111/1477-8947.12484
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