The effect of land tenure governance on technical efficiency: evidence from three provinces in eastern China

ABSTRACT

This study aims to identify the mechanisms through which land tenure governance affects the technical efficiency of grain production in an integrated framework and to examine the impacts of the public governance, village self-governance, and relational governance of land tenure on the technical efficiency of contracted land and rented-in land. Farm-level survey data collected from Liaoning, Jiangxi, and Jiangsu provinces covering the years of 2014 and 2015 is used for the empirical analysis. The findings indicate that (i) public governance associated with land certification significantly increases the technical efficiency of grain production; (ii) village self-governance and administrative land reallocations can serve as substitutes for the land rental market in optimizing the distribution of land resources and improving technical efficiency; and (iii) compared to multi-year transfer contracts, both annual and open-ended transfer contracts have negative impacts on technical efficiency.

KEYWORDS:

• Land tenure governance
• tenure security
• technical efficiency
• China

JEL CLASSIFICATION:

• Q15
• D24

Acknowledgments

Financial support for this paper has been gratefully received from the National Natural Science Foundation of China (71373127, 71573134, 71773054 and 71603121), the National Key R&D Program of China (the SURE+ Project, 2016YFE0103100), and the China Postdoctoral Science Foundation (2016M601839).

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Models are estimated using the sfcross command in Stata 14, which is a new Stata command for the estimation for cross-sectional data. It extends the official frontier command (the one-step method) by including additional models and command functionality, such as the possibility of managing complex survey data characteristics (Belotti et al. 2012).:

² We also tried the one-step analysis in Stata in order to test the robustness of our findings obtained from the two-step analysis; however, no convergence was achieved.