Exploring the Influence of Land Titling on Farmland Transfer-Out Based on Land Parcel Data

Abstract

Existing literature about the impact of farmland titling on farmland transfer takes no account of farmland plot characteristics, which makes them unable to effectively identify the causal relationship between farmland titling and farmland transfer. After the theoretical analysis, based on land plot level micro-survey data, we adopt the instrumental variable (IV) and conditional mixed process (CMP) methods to ease the endogeneity problem in the model and conduct a quantitative analysis. The results show that the land titling program has significant and positive effects on the transfer-out of farmland. Through a heterogeneity test, we observe a more pronounced promotional effect in regions with a higher economic development level and in farmland transfer deals with government facilitation. Moreover, the further application of a mediating effect model shows that the land titling program increases the net income from farmland transfer-out through increasing the value of farmland and reducing the transaction costs, thus promoting the transferring out of farmland. The findings contribute to providing empirical evidence for how the government may facilitate and support the attaining of more efficient scale operations of farmland.