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Development of Land Rental Markets in Rural Zhejiang: Growth of Off-farm Jobs and Institution Building

Published online by Cambridge University Press:  14 January 2005

Qian Forrest Zhang ,
Ma Qingguo  and
Xu Xu
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Abstract

We employ survey data collected in 2001 in Zhejiang province to investigate patterns and determinants of land market development. Previous studies have noted the correlation between growth of off-farm jobs and rental-market development at the aggregate level, but failed empirically to demonstrate mechanisms at the disaggregate level. Our analyses find concrete evidence at the household level connecting developments in labour and land markets. Growth in off-farm jobs allow rural households to transfer labour out of farming and prompt them to relinquish land rights, generating a supply of land that drives rental activities. We also go beyond interactions between factor markets and examine how local institution building promotes rental-market development. Institutions that either lower transaction costs or secure property rights are found to be crucial in explaining cross-regional variations in rental-market development. Finally, the rise of land rental markets also highlights the role of collective ownership in shaping rural development trajectory.

Type
Research Report
Information
The China Quarterly , Volume 180 , December 2004 , pp. 1050 - 1072
Copyright
© The China Quarterly, 2004

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Footnotes

The authors are grateful to Ivan Szelenyi, Deborah Davis, Anthony Spires and participants at the Comparative Research Workshop and Workshop on Hardship in Rural China (both held at Yale University) for their helpful comments. We also wish to thank members of the research team at Zhejiang University, in particular Wang Rui, for their help during the data collection.