Why does the short-term contract dominate in China s rural land transfer market?

Y. Zhang, W. Liu and J. Cai

No 277173, 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia from International Association of Agricultural Economists

Abstract: There is a paradox in rural land transfer in China: it is taken for granted that the preference is for long-term tenancy, which may result in long-term investment and more thorough conservation practices; but in reality, short-term tenancy that is, usually one year or less dominates. By building a theory model and undertaking binary logistic analysis of survey data, we discover two fundamental reasons for the dominance of short-term tenancies that help explain this paradox: (1) owing to unstable land ownership, the high relative income per capita between non-agricultural and agricultural sectors and the close relationship between lessors and lessees, the transaction costs of leasing land are rather high, meaning that long-term leases are a better choice for lessors while short-term leases favor lessees; (2) these same three factors mean that the Chinese land lease market is a buyer's market that is, one in which the lessee has the upper hand so it is the preference of the lessee that determines the nature of the market as a whole. Acknowledgement : This research is supported by Institue of Agricultural Economy and Development, Chiese Academy of Agricultural Sciences through Innovation project. We also thank Professor Zhong Tang for his valueble comments for this paper.

Keywords: Land; Economics/Use (search for similar items in EconPapers)
Date: 2018-07
New Economics Papers: this item is included in nep-agr, nep-cna and nep-tra
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/277173/files/1212.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae18:277173

DOI: 10.22004/ag.econ.277173

Access Statistics for this paper

More papers in 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia from International Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().