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The Distribution of Residual Controls and Risk Sharing: A Case Study of Farmland Transfer in China

by 1 and 2,*
1
School of Public Affairs, Zhejiang University, Qizhen Building, 866 Yuhangtang Road, Hangzhou 310058, China
2
School of Management, Zhejiang University, Qizhen Building, 866 Yuhangtang Road, Hangzhou 310058, China
*
Author to whom correspondence should be addressed.
Sustainability 2018, 10(6), 2041; https://doi.org/10.3390/su10062041
Received: 26 April 2018 / Revised: 31 May 2018 / Accepted: 12 June 2018 / Published: 15 June 2018
Structuring contracts to share interest and risk is the central premise of farmland transfer, yet the contract framework and its determinants have rarely been empirically tested based on micro-level data. In this study, we aim to examine factors underlying the balanced distribution of residual controls and risk sharing on contract framework by using field surveyed data of 353 individual farmland transfer contracts. Our evidence shows that the policy of farmland property rights registration has a significant effect on the contract framework and supports the implication of enforcement costs exerted by the effects of the scale ratio and the contract form, contract duration, conversion way, and long-lived assets input. Although our findings fail to support the typical implication of risk sharing as an explanation of contract framework of farmland transfer, given the symmetric positions of two contracted parties of rural farmer households, it is proved that right confirmation and contract duration are two important factors underlying contract options. View Full-Text
Keywords: farmland transfer; contract framework; risk sharing; China farmland transfer; contract framework; risk sharing; China
MDPI and ACS Style

Han, H.; Li, H. The Distribution of Residual Controls and Risk Sharing: A Case Study of Farmland Transfer in China. Sustainability 2018, 10, 2041. https://doi.org/10.3390/su10062041

AMA Style

Han H, Li H. The Distribution of Residual Controls and Risk Sharing: A Case Study of Farmland Transfer in China. Sustainability. 2018; 10(6):2041. https://doi.org/10.3390/su10062041

Chicago/Turabian Style

Han, Hongyun, and Hanning Li. 2018. "The Distribution of Residual Controls and Risk Sharing: A Case Study of Farmland Transfer in China" Sustainability 10, no. 6: 2041. https://doi.org/10.3390/su10062041

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