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In China, rural construction land refers to the construction land of townships (town) and villages. The construction land of townships (town) and villages refers to the land used by township (town) and village collective economic organizations and rural individuals to invest or raise funds for various non-agricultural construction. Rural collective construction land is divided into three categories: homestead, land for public welfare public facilities, and land for business. Complete market transaction rules can make the market of rural collective construction land run more openly, fairly, and justly, thus protecting the rights of villagers and collective economic organizations and, at the same time, reducing the transaction cost of the village collective. In this paper, we choose the formal rules of the urban and rural land linking quota trading market in Ezhou, Hubei Province, China, to analyze the three dimensions of the market transaction rules and villagers' willingness. We also provide suggestions for the development of the RCCL market and the improvement of trading rules. The research results of the logistic model show the following: (1) Under the arrangement of the transaction rules of the RCCL, there are high transaction costs, especially labor costs and time costs, so the villagers' willingness to enter the market is not very strong. (2) Asset specificity affects villagers' willingness. The larger the area of RCCL involved in the transaction, the higher the transaction cost, the lower the villagers' willingness to support the RCCL transfer. (3) The greater the uncertainty of the RCCL transaction environment—mainly due to the problems of the openness, equity, and justice of the transaction rules, which lies in the transaction information not being transparent and the income distribution and the pricing being unreasonable, resulting in villagers' rights being denied—the more the villagers are unwilling to support the RCCL entering the market. Therefore, we suggest that more open, fair, and just trading rules of the RCCL market should be formulated to protect the security of villagers' property rights. Moreover, the land value should be displayed reasonably, which can also standardize the good trading order and trading environment, thus making the market development more effective and stable. Our work provides some insights for improving the efficiency of the land market, which will contribute to the development of the worldwide RCCL market. [ABSTRACT FROM AUTHOR]

Highlights • The horizontal integration of collective organization in Nanhai can reduce the transaction costs of rural construction land. • Transaction costs in the rural construction land market will decrease when the level of self-organization governance rises. • Compared with Economic Cooperatives, the Economic Joint Communities is more efficient in terms of transaction costs. Abstract High transaction costs caused by dispersed and fragmented tracts, insecure tenure and incomplete information in rural land market has become a common issue in the transition economies. Horizontal integration may economize on transaction costs but aggrandize governance inputs. Therefore trade-off between integration and governance is one of the biggest challenges in land commercialization and rural restructuring worldwide. Resorting to a field survey in Nanhai District, Guangdong Province, this work estimates how the transaction costs of rural collective construction land are influenced by the horizontal integration degree and the level of self-organization governance of collectives. Four Tobit models are constructed based on the scale of collectives and the results show that: (1) There is an almost U-shaped relationship between the horizontal integration degree of the collectives and the transaction costs. The horizontal integration among shareholders can not only centralize the fragmented land assets from individual farmers and reduce the transaction costs of rural construction land, but also result in organization costs. The transaction costs are not decreasing as the horizontal integration increases until the transaction costs saved are equal to resultant organization costs. (2) The more collective leaders, the higher organization costs and the more opportunism behaviors, which will give rise to the transaction costs. This suggests that the Chinese authorities should strengthen the ongoing efforts to reduce the transaction costs of market and improve the efficiency through a more transparent and accessible market and optimal scale of horizontal integration of the collective. Our work sheds some light on the mechanisms at play in the reform and innovation of rural grass-root governance and it contributes to a better understanding of land-based shareholding cooperation system and nature of ongoing rural construction land market in China and transitional economies. [ABSTRACT FROM AUTHOR]

The rural collective construction land (RCCL) market imperfections, as well as informal regulations, may have contributed to high transaction costs. Well-functioning land markets play an essential role in land-use revenue, land-use efficiency, and land allocation efficiency for the rural collective economic organization (RCEO). Therefore, specific land-use patterns and detailed transaction rules for the land rental market and land sales market, respectively, make a contribution to a suitable market model with lower transaction costs and higher market efficiency. Through an empirical investigation in Nanhai District, Gungdong Province, this article builds on the theoretical framework of Williamson's transaction costs, where the asset specificity, uncertainty, and transaction frequency have a significant influence on the RCCL market model choice. Probit model results show that (1) the RCEO prefers to choose the land sales market when the RCCL market has higher asset specificity so that the land sales market can counteract transaction costs by creating land revenue for long-term investments. Thus, the land sales market is a more appropriate choice when the trading land is a large area in a great location. (2) The rental market choice is more suitable for the RCCL market with higher transaction uncertainty. Therefore, the RCEO can detail transaction rules for the land sales and rental markets, respectively. We propose that local governments need to announce regulations for the longest contract period and the land development planning (floor area ratio, building density, floor height, etc.) of different land-use types (industrial land and commercial land) for the land sales market and the land rental market. [ABSTRACT FROM AUTHOR]

This paper analyzes market efficiency under the formal transaction rules of the rural collective construction land (RCCL) market in Nanhai District. These transaction rules are not perfect, market uncertainty is strong, and transaction costs remain high. Transaction rules are an important means by which the government can intervene in the market, protect farmers' land-use and income rights, and make the market more open, equitable, and just. Using a field survey (260 questionnaires) in Nanhai District, Guangdong Province, China, we estimated the impact of the openness, equity, and justice of transaction rules on the transaction costs of the RCCL market. Tobit models were constructed, and the results showed the following: (1) The overall level of market efficiency of the RCCL in Nanhai District is low. In different regions, the highest market efficiency is in Guicheng Street and the lowest is in Xiqiao Town. However, after excluding the influence of environmental and random factors, the overall level of market efficiency decreased, while the market efficiency of Lishui and Xiqiao Town increased. (2) The influencing factors of RCCL market efficiency under the arrangement of transaction rules are mainly related to the disclosure of information in the openness dimension, income distribution and supervision in the fairness dimension, and land-price formation in the fairness dimension. Therefore, we suggest that the lower the transaction cost of an RCCL market, the more active the market will be. It is very important to improve the transaction rules of the RCCL market, reduce the transaction cost, and improve the market efficiency. The transaction rules of the RCCL market should be further improved in the three dimensions of openness, equity, and justice. Our work provides insight into the improvement of market efficiency, which contributes to the development of the RCCL markets in other areas of China and worldwide. [ABSTRACT FROM AUTHOR]

The high transaction costs due to the incomplete information and transaction rules of the rural collective construction land (RCCL) market indicate that the government must improve the rural collective construction land market. Transaction rules are an important means for the government to intervene in the market and promote the development of market order, to secure land tenure, and to improve the disclosure of information. Vertical integration may reduce enterprise transaction costs but will increase the governance cost of internal organizations in enterprises. Land commercialization and corporate governance restructuring is a considerable challenge worldwide. Using a field survey in Nanhai district, Guangdong province, China, we estimated how the transaction costs of the RCCL are influenced not only by three dimensions of transaction rules—openness, equity, and justice—but also by the human asset in EC or EJC. Tobit models were constructed, and the results show that (1) the greater number of collective leaders, the higher the enterprise transaction cost (human asset in EC or EJC increases transaction costs of enterprises) and (2) the transaction rules are not sufficiently open or fair, which leads to high costs of market information searching, opportunism, and corruption. The transaction information is not transparent and the lag in transaction supervision mode gives rise to unfair transactions, in which the formation mode of land price is unreasonable. Therefore, we suggest that the transaction rules of RCCL market should be further improved in the three dimensions of openness, equity, and justice. Chinese authorities should strengthen their current efforts to build a more open and fair market by reducing the transaction costs of enterprises and improving the transaction efficiency. Our work provides some insights into the improvement of market efficiency which will contribute to the development of the RCCL market in other areas of China and worldwide. [ABSTRACT FROM AUTHOR]