Land Property Rights and Rural Enterprise Growth: Evidence from Land Titling Reform in China

58 Pages Posted: 28 Mar 2022

See all articles by Di Bu

Di Bu

Macquarie University, Department of Applied Finance

Yin Liao

Macquarie University - Department of Applied Finance and Actuarial Studies; Australian National University - The Centre for Applied Macroeconomic Analysis (CAMA)

Date Written: February 25, 2022

Abstract

We exploit a large-scale land titling reform in China that clearly entitles rural households to
land rights by issuing uniform land use certificates and study how this impacted entrepreneurship
in rural areas. We find that the reform significantly increases business creation in rural
areas without decreasing the quality of new entrants or incumbent businesses. It also spurs
entrepreneurship among professional and large farmers and attracts more urban residents
to start new businesses in rural areas. Additional analysis provides evidence that increased
land and labor availability and productivity, and improved social trust may serve as the
mechanisms underlying these effects. Altogether, these results reveal that well-defined land
property rights have enabled more enterprise growth in rural areas.

Keywords: Land Property rights, Enterprise, Collateral, Labor mobility, Social trust

JEL Classification: J15, L26, M13

Suggested Citation

Bu, Di and Liao, Yin, Land Property Rights and Rural Enterprise Growth: Evidence from Land Titling Reform in China (February 25, 2022). Journal of Development Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4043771

Di Bu

Macquarie University, Department of Applied Finance ( email )

North Ryde
Sydney, New South Wales 2109
Australia

Yin Liao (Contact Author)

Macquarie University - Department of Applied Finance and Actuarial Studies ( email )

Eastern Rd.
North Ryde
Sydney, NSW 2109
United States

Australian National University - The Centre for Applied Macroeconomic Analysis (CAMA) ( email )

Canberra, Australian Capital Territory 2601
Australia

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