Land Use Rights Transaction, Credit Choices, Risk Rationing, And Entrepreneurship Amongst Chinese Farm Households

Using data from 730 farm households in Shaanxi province collected in November 2010, three studies focusing on a policy reform allowing Chinese farmers to transact land use rights and its impact on risk rationing in a rural credit market and entrepreneurial intention in China are presented. The first study is "On the Transaction Values of Land Use Rights in Rural China under Rural Policy Reform". This study examines the economics of transaction in LURs, estimates the value at which LURs could transact in equilibrium, and analyzes factors that would affect these price changes. We evaluate farmer‟s intention to buy and sell LURs and how much they are willing to pay and receive for LURs. The next study is "Risk Rationing in China Rural Credit Markets" providing a specific test of the Boucher et al. (2008) framework to determine the extent of risk rationing amongst potential rural borrowers. We find the incidence of risk rationing in rural China is in the order of 6.5%, with about 14% being quantity rationed and the remainder being price rationed. We investigate factors associated with risk rationed, quantity rationed and price rationed farmers and provide evidence that the elasticity of demand for credit is different among them. The final study draws a comparison between entrepreneurship and technology adoption. We apply an „entrepreneurship as technology adoption‟ model to a unique dataset collected in Shaanxi province, China and Kentucky, USA. The uncertainty in household income and changes in economic environment during the Chinese Land Use Rights Regime and the US Tobacco Transition Payment Program lead many individuals into entrepreneurial activities. We examine the factors associated with entrepreneurial intention and compare entrepreneurs‟ attitude between two countries