Does Land Transfer Promote the Increase of Farmers’ Capital Investment? ——A Research Based on Capital Gains
XU Zhong1, JIN Hong-tao1,2
1.School of Economics and Management,Shanghai Ocean University,Shanghai 201306,China; 2.Antai College of Economics and Management,Shanghai Jiao Tong University,Shanghai 200052, China
Abstract：
The rapid development of urbanization and industrialization will promote the labor and land transfer which will encourage the farmers who stay in the villages to increase borrowing and capital investment so as to increase economic returns. In order to test this theory, a theoretical model is constructed based on the capital structure theory. Hypotheses are put forward and empirical tests are conducted. Theoretical analysis shows that the influence of the increase in land transfer and capital investment on the net rate of returns is uncertain. Empirical results show that under the circumstance of agricultural growth rate long being lower than the capital interest rate, the increase of borrowing and investment does not bring the increase of returns for farmers under the “double pressure” of cost and price. The land transfer has no effect on farmers’ overall capital investment, but has a positive impact on the net rate of return, which shows that the loan is mainly used in non-agricultural activities. It also indicates small-scale land transfers are neither sufficient to significantly increase the total return of farmers, nor to make them more motivated to increase agricultural investment.
XU Zhong, JIN Hong-tao.Does Land Transfer Promote the Increase of Farmers’ Capital Investment? ——A Research Based on Capital Gains[J] Economic Survey, 2018,V35(5): 58-65
2018 
