5432015-11-01 , Institute of Developing Economies (IDE-JETRO)
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.
JEL:O12 - Microeconomic Analyses of Economic Development JEL:Q12 - Micro Analysis of Farm Firms, and Farm Input Markets JEL:Q15 - Land Ownership and Tenure; Irrigation China Land tenure Agriculture Right of property Agricultural economies Farmland reallocation Farmland rental market Rural China
Institute of Developing Economies (IDE-JETRO)
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