Nonfarm employment, large-scale farm enterprises and farmland transfer in China: a spatial econometric analysis

Abstract While farmland transfer in rural China has emerged as a critical issue in China’s land use policy, there are many unanswered questions about the factors behind ongoing farmland transfer. This study uses survey data from 243 villages in Southwest China to examine how nonfarm employment and large-scale farm enterprises might affect farmland transfer. Specifically, this paper employs a spatial autoregressive (SAR) model with a geographic distance weighting matrix at the village level to explore this effect. Empirical results suggest that the proportion of migrant workers and large-scale farm enterprises positively affects the scale of farmland transfer, while the proportion of local nonfarm workers negatively affects it. By comparing estimation results from the SAR with those from the OLS model, it is found that the OLS model may overestimate the positive impact of migrant workers and underestimate the negative impact of local nonfarm workers on farmland transfer.