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The Role of Trust in Facilitating Land Transfers and Contract Formalization: A Study of Chinese Farm Households

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  • Dongying Xie

    (School of Economics, Jilin University, Changchun 130012, China)

  • Mengbo Xu

    (School of Economics, Jilin University, Changchun 130012, China)

Abstract

Facilitating land transfers and contract standardization is crucial for optimizing farmland use and achieving high-quality agricultural development following the round of confirmation, registration, and certification of contracted rural land management rights by the government. Social trust is crucial for cracking the growth dilemma of land transfer, and the impact of farmers’ trust on land transfer may also change after the round of land titling. This study aims to examine the impact of social trust on farm households’ land transfer decisions and the formalization of land transfer contracts within the context of the new round of land titling in China, using models such as IV-Probit, Heckprobit, and conditional mixed process (CMP), with survey data from 2600 Chinese farmers in 2020–2021. The results show that increased social trust significantly enhances both land transfer and contract formalization, and these results remain robust after addressing potential endogeneity. Further analysis reveals that while interpersonal trust promotes land transfer, institutional trust plays a more pivotal role in the formalization of contracts. The results underscore the importance of strengthening grassroots governance to foster institutional trust, enhance institutional reliability, and support the regulated growth of the land transfer market.

Suggested Citation

  • Dongying Xie & Mengbo Xu, 2024. "The Role of Trust in Facilitating Land Transfers and Contract Formalization: A Study of Chinese Farm Households," Land, MDPI, vol. 13(12), pages 1-17, December.
    • Handle: RePEc:gam:jlands:v:13:y:2024:i:12:p:2088-:d:1536386
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    References listed on IDEAS

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    2. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-548, June.
    3. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
    4. Yangchenhao Wu & Kaifeng Duan & Wang Zhang, 2023. "The Impact of Internet Use on Farmers’ Land Transfer under the Framework of Transaction Costs," Land, MDPI, vol. 12(10), pages 1-18, September.
    5. Bao, Helen X.H. & Jiang, Yan & Wang, Ziyou & Feng, Lei, 2024. "Social capital and the effectiveness of land use policies: Evidence from rural China," Land Use Policy, Elsevier, vol. 139(C).
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