Agricultural Land Rights Confirmation, Clan Network, and Farmers’ Investment in Production and Operation

Abstract

This study is based on micro-survey data on rural household transfers in China. This study uses a multiple linear regression model (to analyze the relationship between variables), an instrumental variable model (to solve potential endogenous problems), and an intermediary effect model to explore the impact of farmland rights confirmation and clan network on farmers’ investment in production and operation and the relationship between clan network confirmation of farmland rights and farmer household investment. The research shows that: (1) The confirmation of farmland rights in China substantially bolsters farmers’ investments in agricultural production and operation. It serves as a secure foundation for land property rights, elevating farmers’ confidence and significantly contributing to the growth of rural economies and the improvement of farmers’ income levels in the Chinese context. (2) In the Chinese context, the existence of clan networks exerts a discernible adverse influence on farmers’ investment decisions in agricultural production and operation. This is primarily attributable to the restricted flow of information within these networks, the enforcement of stringent social norms, and the prevalence of risk-averse attitudes. These factors collectively act as barriers, dampening farmers’ enthusiasm for investment and impeding effective decision-making. (3) Importantly, the confirmation of agricultural land rights in China serves as a counterbalance to the inhibitory effects of clan networks. It achieves this by mitigating information asymmetry and reducing cooperation risks. This proactive approach not only promotes but also facilitates farmers’ investments in agricultural production and operation within the Chinese context. Consequently, land rights confirmation emerges as a key driver of increased rural investments in China. This study conducts in-depth research on the impact of farmland ownership confirmation and clan networks on farmers’ investment behavior and the mechanism of action, which provides a useful reference for formulating relevant policies, such as increasing the authority of cultivated land, promoting the modernization of clan networks, cultivating modern management capabilities, etc.