Abstract
The high transaction costs due to the incomplete information and transaction rules of the rural collective construction land (RCCL) market indicate that the government must improve the rural collective construction land market. Transaction rules are an important means for the government to intervene in the market and promote the development of market order, to secure land tenure, and to improve the disclosure of information. Vertical integration may reduce enterprise transaction costs but will increase the governance cost of internal organizations in enterprises. Land commercialization and corporate governance restructuring is a considerable challenge worldwide. Using a field survey in Nanhai district, Guangdong province, China, we estimated how the transaction costs of the RCCL are influenced not only by three dimensions of transaction rules—openness, equity, and justice—but also by the human asset in EC or EJC. Tobit models were constructed, and the results show that (1) the greater number of collective leaders, the higher the enterprise transaction cost (human asset in EC or EJC increases transaction costs of enterprises) and (2) the transaction rules are not sufficiently open or fair, which leads to high costs of market information searching, opportunism, and corruption. The transaction information is not transparent and the lag in transaction supervision mode gives rise to unfair transactions, in which the formation mode of land price is unreasonable. Therefore, we suggest that the transaction rules of RCCL market should be further improved in the three dimensions of openness, equity, and justice. Chinese authorities should strengthen their current efforts to build a more open and fair market by reducing the transaction costs of enterprises and improving the transaction efficiency. Our work provides some insights into the improvement of market efficiency which will contribute to the development of the RCCL market in other areas of China and worldwide.
Highlights
Urban land commercialization began in late 1980s in China’s eastern coastal area and was legalized nationally in early 1990s [1,2]
Education level has a negative impact on the rural collective construction land (RCCL) market transaction cost—that is, the higher level of the education, the lower costs of negotiation
Based on Williamson’s transaction cost theory, we analyzed the effect of transaction rules on the transaction cost of enterprises in the rural collective construction land market
Summary
Urban land commercialization began in late 1980s in China’s eastern coastal area and was legalized nationally in early 1990s [1,2]. In order to meet demand of urban economic development and TVEs, the local government legally or illegally converted farmland at the rural–urban fringe or superior location to absorb the investment of foreign capital, China’s Hong Kong, China’s Taiwan, or joint venture [5,6,7]. The strategy of substitution of capital for land on one hand booms China’s eastern coastal area, on the other hand gives rise to huge stock construction lands in rural and urban areas [8]. The RCCL located spatially fragmented and scattered, negotiation between urban developers and individual farmer households incur huge costs [3,5,6]. Facing huge RCCL and legal regulation, local governments either transfer implicitly or self-organize scattered farmer households horizontally [10]
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
