The Impact of Internet Use on Farmers’ Land Transfer under the Framework of Transaction Costs

Abstract

The problems that exist in China’s agricultural operations are not only on a small scale; more seriously, there are also problems of land fragmentation and the mismatch of human and land resources. Land transfer is expected to be a tool for solving these problems. The land transfer market development is slow, leaving farmers facing serious information asymmetry. On the back of the information explosion brought about by information technology represented by the Internet, exploring the impact of Internet use on land transfer can provide ideas to improve the solution of land problems. Based on the cost theory analysis framework of new institutional economics, this paper empirically examines the impact of Internet use on farmers’ land transfer behavior. The results of the study show that Internet use can significantly increase the probability and scale of household land transfer by reducing the fixed and variable costs of transactions. This conclusion still holds after using instrumental variables to address endogeneity. The impact of Internet use on land transfer is heterogeneous, with the younger, more educated, and higher-income household heads tending to participate in the land transfer market on a larger land transfer scale. Therefore, rural Internet infrastructure should be further improved to alleviate information asymmetry in the land transfer market, further strengthen the training of Internet use skills of farmers, stimulate the enthusiasm of farmers to participate in the land transfer market, further increase farmers’ income, enhance the elasticity of farmers’ response to the use of the Internet to reduce transaction costs, and promote land transfer.