Land property rights and rural enterprise growth: Evidence from land titling reform in China

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 d...

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Bibliographic Details
Published inJournal of development economics Vol. 157; p. 102853
Main Authors Bu, Di, Liao, Yin
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.06.2022
Subjects
Collateral
Enterprise
Labor mobility
Land property rights
Social trust
L26
Social trust
Enterprise
Labor mobility
Collateral
M13
J15
Land property rights
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Summary: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. •Land property rights impact rural entrepreneurship.•Professional and large farmers contribute to more start-ups after land reform.•Urban residents start more small businesses after land reform.•Economic mechanisms are identified.
ISSN:0304-3878
1872-6089
DOI:10.1016/j.jdeveco.2022.102853