Market Efficiency under the Arrangement of Transaction Rules of the RCCL Market from the Supply-Side Perspective

Abstract

This paper analyzes market efficiency under the formal transaction rules of the rural collective construction land (RCCL) market in Nanhai District. These transaction rules are not perfect, market uncertainty is strong, and transaction costs remain high. Transaction rules are an important means by which the government can intervene in the market, protect farmers’ land-use and income rights, and make the market more open, equitable, and just. Using a field survey (260 questionnaires) in Nanhai District, Guangdong Province, China, we estimated the impact of the openness, equity, and justice of transaction rules on the transaction costs of the RCCL market. Tobit models were constructed, and the results showed the following: (1) The overall level of market efficiency of the RCCL in Nanhai District is low. In different regions, the highest market efficiency is in Guicheng Street and the lowest is in Xiqiao Town. However, after excluding the influence of environmental and random factors, the overall level of market efficiency decreased, while the market efficiency of Lishui and Xiqiao Town increased. (2) The influencing factors of RCCL market efficiency under the arrangement of transaction rules are mainly related to the disclosure of information in the openness dimension, income distribution and supervision in the fairness dimension, and land-price formation in the fairness dimension. Therefore, we suggest that the lower the transaction cost of an RCCL market, the more active the market will be. It is very important to improve the transaction rules of the RCCL market, reduce the transaction cost, and improve the market efficiency. The transaction rules of the RCCL market should be further improved in the three dimensions of openness, equity, and justice. Our work provides insight into the improvement of market efficiency, which contributes to the development of the RCCL markets in other areas of China and worldwide.