Clan Networks, Spatial Selection, and Farmland Transfer Contracts: Evidence from China

Abstract

Contracts play a crucial role in the reform of land markets and the process of farmland transfer. This study examines how spatial distance and clan networks impact the choice of farmland transfer contracts based on micro-level survey data from farmer households in China. Our research findings offer valuable insights into the role of contracts as a governance tool in land market reform and provide important implications for policymakers and stakeholders. In this study, we reveal that spatial distance significantly influences the selection of farmland transfer contracts. When farmers face long spatial distances, they tend to prefer written contracts to regulate the transfer relationship. This preference helps to mitigate information asymmetry and cooperation risks, ensuring a more secure and efficient transfer process. Additionally, our findings show that clan networks also play a significant role in the choice of farmland transfer contracts. Strong clan networks in high-density areas often have well-defined social norms and codes of conduct. As a result, farmers in these areas are more likely to opt for written contracts, which provide a formalized framework for governing farmland transfers. Furthermore, the density of the clan network acts as a moderator in the relationship between spatial distance and contract choice. A dense clan network intensifies the influence of spatial distance on contract choice, especially when dealing with long spatial distances. This suggests that social networks and community dynamics play a crucial role in shaping farmers’ contract preferences in farmland transfer. In conclusion, this study highlights the importance of contracts as a governance tool in land market reform and provides insights into the influence of spatial distance and clan networks on the choice of farmland transfer contracts. Policymakers and stakeholders involved in land market reforms should consider the findings of this study when designing policies and interventions. By understanding the dynamics surrounding farmland transfer, policymakers can develop more effective strategies to promote secure and efficient land transactions in the context of market-oriented reforms.