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Is prohibiting land reallocation enough to promote development of farmland rental markets in China?

Shimokawa Satoru

No 543, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: Prohibiting land reallocation improves tenure security, but it remains unclear whether this sufficiently facilitates the development of farmland rental markets in China. To fill this gap, we investigate how farmland rental activities are influenced by full-scale land reallocation (FSLR) and partial land reallocation (PLR), which differ in scale and imposition. Employing the instrumental-variables and the difference-in-differences approaches, we find that PLR substitutes relation-specific contracting in the markets, while FSLR complements arms-length contracting. The different impacts are attributable to the difference in imposition rather than scale. These findings suggest the need for further reforms.

Keywords: China; Land tenure; Agriculture; Right of property; Agricultural economies; Farmland reallocation; Farmland rental market; Rural China (search for similar items in EconPapers)
JEL-codes: O12 Q12 Q15 (search for similar items in EconPapers)
Date: 2015-11-01
New Economics Papers: this item is included in nep-agr, nep-cna and nep-tra
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 543. 2015-11-01

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