Tenure, land rights, and farmer investment incentives in China

Abstract The goal of this paper is to understand the nature of the property rights associated with China's land tenure systems and to study the impact of these property rights on agricultural production efficiency. The results show that land tenure and associated property rights in rural China affect the production behavior of farmers. The most robust finding is that the right to use land for long periods of time encourages the use of land‐saving investments. While the results show that land tenure affects agricultural production decisions, the difference between collective and private plots, however, is small compared to the private plot ‐ communal productivity gap that existed in the pre‐reform period.