On the Transaction Values of Land Use Rights in Rural China

Khantachavana, Sivalai V.; Turvey, Calum G.; Kong, Rong; Xia, Xianli

doi:10.2139/ssrn.2055897

Cited by 4 publications

(4 citation statements)

References 30 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Recent policy initiatives in China are examining transacting and mortgaging LUR (Khantachavana et al, 2013). We asked if there was a willingness to borrow if (Chinese) farmers could use LUR as collateral.…”

Section: Lurmentioning

confidence: 99%

Risk rationing and the demand for agricultural credit: a comparative investigation of Mexico and China

Chiu

Khantachavana²,

Turvey

2014

Agricultural Finance Review

View full text Add to dashboard Cite

Purpose -The purpose of this paper is to determine the extent of risk rationing among potential rural borrowers in Mexico and China. Design/methodology/approach -Using primary survey data from 730 farm households in the Shaanxi province of China and from 372 farmers in northeastern Mexico, the authors investigate factors associated with risk rationed, price rationed and quantity rationed farmers. The survey was instrumented to self-identify borrower typologies. In addition the authors created within the survey a discrete-choice credit demand build to determine borrower credit demand elasticities. The analysis applies a linear probability which the authors found to be consistent with multinomial and binary logit models. Findings -The authors find in China the incidence of risk rationing in farmers to be 6.5, 14 percent for quantity rationed and 80 percent for price rationed. In Mexico, 35 percent of the sample is risk rationed, 10 percent quantity rationed and 55 percent price rationed. The results from China support the hypothesis that the financially poor are more likely to be quantity rationed; in Mexico, however, the level of education is found to be important in determining quantity rationed. In both countries, asset wealthy farmers are less likely to be risk rationed; however, income does not appear to have an impact. The paper provides evidence that the elasticity of demand for credit is different among the three credit rationed groups: risk rationed, price rationed and quantity rationed. Risk aversion and prudence are significantly correlated with risk rationing in China, while only risk aversion is significant in Mexico. The results suggest that efforts to enhance credit access must also deal with risk and risk perceptions. Practical implications -Risk rationing is an important concept in the understanding of rural credit markets. The findings that only 6.5 and 35 percent of Chinese and Mexican farmers are in stark contrast to each other. For agricultural economies such as Mexico with a significant number of farmers being risk rationing, more effort should be put into financial education and financial practices, The current issue and full text archive of this journal is available at AFR 74,2 including perhaps the use of risk-contingent credit to remove collateral risk. As property rights in China evolve, and new laws are promulgated to permit borrowing against land use rights, the collateralization issue will become much more important in rural credit markets. Originality/value -This paper is the first to investigate risk rationing in China and Mexico and one of the few research studies empirically investigating risk rationing. A comparative analysis of Mexico and China is enlightening because of the structural differences in the respective agricultural economies. The use of a credit demand build and the enumeration of individual credit demand elasticities is an original contribution to this literature.

show abstract

Section: Lurmentioning

confidence: 99%

Risk rationing and the demand for agricultural credit: a comparative investigation of Mexico and China

Chiu

Khantachavana²,

Turvey

2014

Agricultural Finance Review

View full text Add to dashboard Cite

show abstract

“…Large-scale mechanised farming is one of the key pathways to modernising the agricultural sector and reallocating farmland from unsuccessful operators to more productive and successful operators (Deininger and Byerlee 2012). In the Property Law of the People's Republic of China promulgated in 2007, land use rights are defined not only as of the right to farm the land but also as contractors' rights to lease, exchange and swap land (Khantachavana et al, 2013). The farmland leasing market is significant to China in general and to rural China, in particular.…”

Section: Background and Literature Reviewmentioning

confidence: 99%

Do Chinese farmers benefit from farmland leasing choices? Evidence from a nationwide survey

Zou

Mishra²,

Luo

2019

Aus J Agri & Res Econ

View full text Add to dashboard Cite

Using China Family Panel Studies (CFPS), this study investigates factors associated with the choice of farmland leasing strategies and the impact of leasing options on farm performance. Particular attention is given to off‐farm employment and farm subsidies. Additionally, the study applies a selectivity‐based approach to assess the relationship between farmland leasing choices and farm businesses’ performance. Off‐farm employment, older and educated operators, large farms and old‐age pension plans increase the likelihood of leasing out farmland. Part‐time off‐farm employment, grain subsidies and mechanised farms increase the likelihood of leasing in farmland. Finally, the selectivity correction terms in the value of crop production are significantly negative in the choices of farmland leasing, indicating the presence of sample selection effects. Accounting for selectivity is essential to ensure unbiased and consistent estimates.

show abstract

“…However, we need to add as a caveat that the allocation of land use rights in China can blur the present results to those in other countries with more established property rights. Although China is currently considering transactability and mortgaging of land use rights, the limited evidence to date suggests that such markets will not be so liquid(Khantachavana et al 2013).…”

mentioning

confidence: 99%

Testing Asset Dynamics for Poverty Traps in Rural China

Zhou

Turvey

2014

Canadian J Agri Economics

Self Cite

View full text Add to dashboard Cite

This paper quantifies the link between agricultural income, caloric intake, and asset‐based poverty in rural China. The analysis employs data from the China Health and Nutrition Survey including 1,279 households in eight survey years. The balanced data models are then estimated to reveal the role that various shocks (e.g., prices and climate/weather) play in determining the asset dynamics between different income groups using four different asset indexes which cover comprehensive, fixed, productive, and consumable assets. To capture absolute asset dynamics, a fourth‐degree polynomial function was used in a three‐stage least squares system made up of an asset index, caloric intake, and farm income. The empirical results do not show evidence of a poverty trap based on multiple equilibriums.

show abstract

On the Transaction Values of Land Use Rights in Rural China

Cited by 4 publications

References 30 publications

Risk rationing and the demand for agricultural credit: a comparative investigation of Mexico and China

Risk rationing and the demand for agricultural credit: a comparative investigation of Mexico and China

Do Chinese farmers benefit from farmland leasing choices? Evidence from a nationwide survey

Testing Asset Dynamics for Poverty Traps in Rural China

Contact Info

Product

Resources

About