What Drives Landowners to Resist Selling Their Land? Insights from Ethical Capitalism and Landowners’ Perceptions

Abstract

Foreign land grabbing is acknowledged as a phenomenon that generates disempowerment and dispossession of local farmers, human rights violations. Previous studies have revealed the lack of ethical benchmarks in foreign large-scale land transactions that raise moral concerns. It is evident that when resources are scarce and people depend on them, the balance between values and interests transforms itself into a dilemma. Within this context, the aims of the paper were to bring to the fore critical reflection on a more ethical perspective of large-scale land acquisitions and to extend the scant information on what factors determine landowners not to sell their land to foreigners to limit land grabbing. This context justifies the need for a critical reflection on a more ethical perspective of large-scale land acquisitions. Therefore, two objectives were set. The first one is to document the role of ethics in large-scale land transactions. Based on the land grabbing literature, authors selected a set of eight land grabbing narratives, most often interrelated and overlapping, that pose ethical considerations. The second objective is to reveal how well a set of variables can predict the “Resistance to sell” the land to foreigners even when an attractive price is offered. As ethics is a social construct, the analysis captured the stakeholders’ perspective on land grabbing. Therefore, a questionnaire was applied to a sample of 332 Romanian landowners from twelve randomly selected counties to reveal their perceptions. Partial least squares structural equation modeling (PLS-SEM) was used to observe how well a set of seven variables could predict landowners’ “Resistance to sell” their land to foreign buyers. The use of PLS-SEM was justified by the existence of single items and the need to examine many structural model relations. Results showed that the variables with the strongest contribution to the prediction of the dependent variable are the “Probability to join an association for farmers rights defense”, the “Importance of the land price offered by the potential foreign buyer”, and the “Perceived effect of agricultural land conversion to urban land”. Raising awareness on the importance of buyer attributes, increasing people’s perception of the negative effect of agricultural land conversion to urban land, or strengthening the state’s image as a necessary actor to limit land grabbing will increase landowners’ resistance to sell their land to foreigners. Finally, it can be inferred that, within this frame of discussion, ethics should be valued as a means to create economically viable and morally justifiable solutions for foreign large-scale land transactions.