The development of the land lease market in rural China

This paper examines the development of the land lease market in rural China . Special attention is paid to productive heterogeneity among farmers and t he openness of the labor market in activating the land lease market. A theo retical model is employed to explore the underlying connections. An econome tric model is implemented using a tw o-period panel data set gathered in th ree counties of China's Zhejiang province. The results show that productive heterogeneity and a freer labor market do promote more land leases. The im plications for the institutional change literature are discussed.