The Marketization of Rural Collective Construction Land in Northeastern China: The Mechanism Exploration

The transfer of rural collective construction land into the market (RCCL marketization) is an important starting point for breaking the urban–rural dual system, realizing the sustainable use of land resources and promoting the integrated development of urban and rural areas in China. This study aims to explore the decision-making of rural households in the marketization of rural collective construction land (RCCL) by constructing a two-stage (cognition-decision) theoretical framework. Based on the household survey data collected from the pilot areas in the three northeastern provinces in China, the structural equation modelling (SEM) has been applied. The main findings are as follows: (1) the four types of exogenous latent variables, including information dissemination, management of collective economic organizations (CEOs), family characteristics, and household head characteristics, are intermediary by household cognition, which then positively affect households’ behavior and decision-making. (2) among the factors affecting household cognition, the management of CEOs exhibits the most significant impact, followed by information dissemination, family characteristics, and household head characteristics. (3) the measurable variables, including participation rights, whether there are collective operating assets, education level, and whether members have social insurance, have significant effects on the four exogenous latent variables. (4) the understanding of income distribution policy has the greatest positive impact on household cognition, while risk perception has the opposite effect, indicating an obvious “risk aversion” tendency for rural households. The findings imply that the government should improve the existing RCCL market entry system from the aspects of strengthening collective economic organization construction, land value-added income sharing mechanism, and clarifying rural land property rights, so as to reduce farmers’ decision-making risks and enhance value perception. Overall, the research presented here contributes to investigating the theoretical mechanism of household decision-making and providing empirical evidence on how to improve the marketization of rural collective construction land in China.

Effect of Transaction Rules on Enterprise Transaction Costs Based on Williamson Transaction Cost Theory in Nanhai, China

The high transaction costs due to the incomplete information and transaction rules of the rural collective construction land (RCCL) market indicate that the government must improve the rural collective construction land market. Transaction rules are an important means for the government to intervene in the market and promote the development of market order, to secure land tenure, and to improve the disclosure of information. Vertical integration may reduce enterprise transaction costs but will increase the governance cost of internal organizations in enterprises. Land commercialization and corporate governance restructuring is a considerable challenge worldwide. Using a field survey in Nanhai district, Guangdong province, China, we estimated how the transaction costs of the RCCL are influenced not only by three dimensions of transaction rules—openness, equity, and justice—but also by the human asset in EC or EJC. Tobit models were constructed, and the results show that (1) the greater number of collective leaders, the higher the enterprise transaction cost (human asset in EC or EJC increases transaction costs of enterprises) and (2) the transaction rules are not sufficiently open or fair, which leads to high costs of market information searching, opportunism, and corruption. The transaction information is not transparent and the lag in transaction supervision mode gives rise to unfair transactions, in which the formation mode of land price is unreasonable. Therefore, we suggest that the transaction rules of RCCL market should be further improved in the three dimensions of openness, equity, and justice. Chinese authorities should strengthen their current efforts to build a more open and fair market by reducing the transaction costs of enterprises and improving the transaction efficiency. Our work provides some insights into the improvement of market efficiency which will contribute to the development of the RCCL market in other areas of China and worldwide.