Institutional Regime, Off-Farm Employment, and the Interaction Effect : What are the Determinants of Households' Forestland Transfer in China?

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Zhang , H , Kuuluvainen , J , Ning , Y , Liao , W & Liu , C 2017 , ' Institutional Regime, Off-Farm Employment, and the Interaction Effect : What are the Determinants of Households' Forestland Transfer in China? ' , Sustainability , vol. 9 , no. 10 , 1885 . https://doi.org/10.3390/su9101885

Title: Institutional Regime, Off-Farm Employment, and the Interaction Effect : What are the Determinants of Households' Forestland Transfer in China?
Author: Zhang, Han; Kuuluvainen, Jari; Ning, Youliang; Liao, Wenmei; Liu, Can
Contributor: University of Helsinki, Department of Forest Sciences
Date: 2017-10
Language: eng
Number of pages: 15
Belongs to series: Sustainability
ISSN: 2071-1050
URI: http://hdl.handle.net/10138/229674
Abstract: The development of the land rental market has been widely attributed to the associated institutional regime and the functioning of the off-farm labor market. However, little is known of the interaction effect of these two factors. To fill this gap, we employ a nationwide representative household dataset to investigate the effects of China's collective forest tenure reform (CFTR) and off-farm employment on forestland transfer in China. Special interest is focused on their potential interaction effect. The Smith-Blundell instrumental variable tobit model is adopted to account for the endogeneity of off-farm employment. The estimation results show that both the tenure reform and off-farm employment significantly influence forestland transactions. However, compared to the positive effect of the reform on both renting in and renting out forestland, the effect of off-farm employment is mixed, that is, its effect is negative when forestland is rented in but positive on rent-out decisions. An important finding is that the CFTR imposes a negative enhancement effect on forestland rent-in through its interaction term with off-farm employment. In contrast, the enhancement effect on rent-out is not statistically significant, which may be due to the neutralization by the endowment effect of the CFTR.
Subject: collective forest tenure reform
China's forestland transfer
off-farm employment
interaction effect
endogeneity
instrumental variable tobit
LAND RENTAL MARKETS
RURAL CHINA
TENURE REFORM
LABOR-MARKETS
GROWTH
PARTICIPATION
CERTIFICATION
ARRANGEMENTS
INVESTMENT
MANAGEMENT
4112 Forestry
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