Postdoctoral Researcher Xu He from Professor Hongmei Yi’s Team Publishes First-Author Paper in Economic Development and Cultural Change, Revealing the Impact of Village Collective Intermediary Services on Competition in China’s Rural Land Transfer Market

Release date：2026/05/18　　Source： CCAP

Recently, a research paper titled “Intermediary Services and Rural Land Market Competition: Evidence of Regional Heterogeneity in China” authored by Dr. Xu He, postdoctoral researcher in Professor Hongmei Yi’s team at the School of Advanced Agricultural Sciences, Peking University, has been accepted for publication in the leading development economics journal Economic Development and Cultural Change. Professor Hongmei Yi is the corresponding author of the paper. Other co-authors include Professor Scott Rozelle from Stanford University and Professor Takeshi Sakurai from The University of Tokyo.

Well-functioning competition in rural land markets helps optimize the allocation efficiency of rural production factors by transferring farmland resources from less productive farmers to more productive ones through market-based price competition. Over the past two decades, China’s rural land transfer market has expanded rapidly, with the farmland transfer rate increasing from 4.57% in 2005 to 14.65% in 2010, and further rising to 35.37% in 2021. However, despite this rapid market expansion, many studies have found that farmland resource misallocation remains prevalent in China, with some evidence even suggesting worsening allocation efficiency.

To explain the underlying causes of this phenomenon, the study uses household survey data collected in 2023 by Professor Hongmei Yi’s research team from 12 counties across four provinces—Shandong, Anhui, Sichuan, and Jilin—to examine how intermediary services provided by village collectives affect the degree of competition in rural land transfer markets. Theoretical analysis based on a spatial competition model shows that intermediary services can promote competition on the demand side of the market by reducing transaction costs for buyers, but this effect only holds when all potential buyers have equal access to such services. Conversely, when intermediary services are provided only to selected buyers, they may actually weaken overall market competition.

Drawing on both the theoretical model and transaction-level survey data, the study first demonstrates that commonly used indicators in previous research—such as acquaintance-based transactions and formal contracts—are not reliable measures of competition intensity in farmland transfer markets. In contrast, the share of flexible rent contracts (i.e., contracts in which rental rates are renegotiated periodically based on harvest outcomes during the contract term) better reflects the intensity of demand-side competition in the market.

The empirical results indicate that although intermediary services provided by village collectives have improved the standardization and regulation of farmland transfers in China, they have not generally enhanced market competition. More notably, heterogeneity analysis shows that in regions where demand-side competition for farmland is already relatively intense, village collective intermediary services actually reduce the level of competition in local land transfer markets. Further analysis attributes this effect to discriminatory access standards embedded in the intermediary services: village collectives tend to restrict services to large-scale farming entities, thereby excluding potential small- and medium-scale tenants. This finding helps explain a paradox widely observed in the existing literature: while the scale of farmland transfers in China continues to expand, the problem of land resource misallocation persists over time.

This study is one of the outcomes of the National Natural Science Foundation of China (NSFC) General Program project led by Professor Hongmei Yi, titled “The Impact of High-Quality Farmer Training Programs on Promoting Rapid Agricultural Growth, Green Development, Agricultural Resilience, and Equity in Rural Livelihoods.”

Detailed information about the project database is available at: http://scholar.pku.edu.cn/hongmei-yi/liang-shi-zhu-chan-qu-san-nong-fa-zhan-wen-ti-yu-dui-ce-yan-jiu-diao-yan

Citation:
He, Xu, Hongmei Yi, Scott Rozelle, and Takeshi Sakurai. Forthcoming. “Intermediary Services and Rural Land Market Competition: Evidence of Regional Heterogeneity in China.” Economic Development and Cultural Change. https://doi.org/10.1086/742299