The Relationships Among Transaction Rules,Transaction Costs And Operation Efficiency Of Collective Construction Land Market

The commercialization of urban land began in the eastern coastal areas of China in the late 1980s,and was legalized nationwide in the early 1990s.With the rapid development of urban land marketization and township enterprises,the urban land is becoming more and more scarce.In order to meet the needs of development of urban economic and the township enterprises,local governments transfer rural collective construction land legally or illegally in rural-urban fringe areas.Faced with the limitation of land management laws and regulations,most of rural collective construction lands can only be transferred implicitly.Different from urban construction land,rural collective construction land is more scattered in space,which leads to higher negotiation cost between urban demanders and farmers.Therefore,the collective economic organization was established and began to horizontally integrate and distribute the plots of farmers for centralized trading.Due to the implicit transfer of rural collective construction land,the corruption between rural cadres and urban developers leads to loss of farmers’ rights and interests,which cannot be reasonably protected.The bottom-up innovation of farmers’ organizations had created land-based shareholding system,and distribution of dividends according to shares.Due to the lack of unified land planning and market guidance and supervision,rural collective construction land transfer was being in disorder.In order to regulate rural collective construction land transfer,a series of Government Administrative Measures for the Transfer of the Right to Use RCCL have been issued at the national and local levels.These rural collective construction land transfer rules regulated the scope of application of collective construction land,and trading institutions,and trading procedures,and supervision of trading process and legal responsibilities,which provide a good trading environment and legal protection for RCCL transfer,so that to promote the openness,equity and justice of RCCL market,and protect the rights and interests of farmers,and promote the development of RCCL market are of significance.The RCCL market has experienced the embryonic,formative and mature stages,especially in Nanhai district of Guangdong Province where China’s economy is relatively developed,the development of RCCL market is relatively more mature.Therefore,taking Nanhai district as an example,this paper studies the relationship between transaction rules,transaction costs and market operation efficiency of collective construction land market.In the early 1980s,taking the advantage of the geographical location and the reform and opening up policy,the local governments in China’s southeastern coastal areas,such as Guangdong province,encouraged the development of township and village enterprises(TVEs).Many Chinese Hong Kong,Chinese Taiwan,and foreign investors built their factories on the rural land in the province,which stimulated rural villagers to convert arable land into nonagricultural uses.Some local regulations and central institutional arrangements legalized rural collective construction land market transactions.In 2005,Guandong provincial government issued the document of the People’s Government Administrative Measures for the Transfer of the Right to Use RCCL of Guangdong Province in 2005,which is the first local regulation of RCCL transfer.The formal rules and local regulations in RCCL transfer in Nanhai District gradually led to the opening and standardization of the RCCL market.The arrangement of transaction rules and the establishment of transfer institutions in China’s southeastern coastal areas have reduced the environmental uncertainty faced by the supply and demand sides in the implicit transfer process.However,due to the short historical period since RCCL entered the market,the incompleteness of market transaction rules,and the lag of corresponding market supervision,the market transaction environment for RCCL remains uncertain.As for the openness of the transaction rules of the RCCL market,it includes the information of the plots,the method of bidding and information about the land transaction results.The equity of transaction rules includes the restrictions on transaction threshold,collection and return of transaction deposit,supervision method,and the income distribution.The justice of transaction rules includes land pricing and service fees.The above three attributes(openness,equity and justice)have a great impact on the market efficiency of rural collective construction land.Based on Williamson’s transaction cost theory and taking the Nanhai District as an example,this paper constructs the theoretical framework of the relationship between the three attributes of transaction rules and transaction cost.This study will help to enrich the literature in this field and provide countermeasures for the development of urban and rural unified land market in China.The conclusions of this paper are as follows:(1)From the perspective of asset specificity,the stronger the asset specificity is,the higher the transaction cost between the supplier(economic cooperatives and economic joint communities)and the demander(enterprise)of the rural collective construction land market.The transaction cost of the supplier is mainly affected by the human capital specificity and physical assets in the operation of the transaction rules.It shows that the more complex the transaction rules are,the more knowledge and skills are needed to better implement the rules,smoothly organize and complete the rural collective construction land transaction,and reduce the risks in the transaction.The transaction cost of the demander is mainly affected by the human capital specialization,but also being affected by the transaction cost of private communication,information acquisition and negotiation between enterprises and co-operative organization caused by imperfect rules.Therefore,the more asset specificity is,the less likely which is to be used for other purposes,so the greater the risk cost of transaction will be.(2)From the perspective of uncertainty,the results show that the market transaction rules of RCCL in Nanhai district are fuzzy and uncertainty in three attributes(openness,equity and justice).From the influencing factors of the transaction cost of the supply and demand sides of the rural collective construction land market,the transaction cost is mainly affected by information search,income distribution,supervision method and land pricing.The market information of rural collective construction land is not transparent,and the farmers know little about the information of the land transfer.The land transaction is mainly led by the rural collective economic organization.Due to the asymmetry of information,the distribution of farmers’ land income is unreasonable,and the interests of farmers are encroached.In addition,land transfer process is complicated and supervision method of RCCL lags behind,there is a blank area of supervision in the transaction process,the trading rules are vague,the supervision subject is unclear,and the supervision object is not strict,which leads to encroachment on the farmers interests indirectly,unfair competition among the enterprises,and inefficient allocation of rural collective construction land.(3)From the market operation efficiency,according to the input-output Three-stage DEA model to calculate the market operation efficiency,the research results show that the overall operation efficiency of rural collective construction land market in Nanhai District is low.In addition,because the operation efficiency of rural collective construction land market is not only affected by the uncertainty of the three attributes of the rules,but also affected by the asset specificity and other external uncertainty environment,after removing these factors,the market operation efficiency presents a downward trend,which shows that the uncertainty influence is obvious,which leads to high transaction cost and low efficiency.From the three attributes of openness,equity and justice of the transaction rules,it is mainly affected by information search,land pricing,supervision method and income distribution,which shows that the transaction rules need to be improved,so as to reduce the market transaction costs of both parties and improve the market operation efficiency.In order to improve the market transaction rules and improve the market efficiency of RCCL,the policy recommendations are as follows:The first is to formulate complete market transaction rules which that can protect the security of market transactions.The complete market transaction rules can make the RCCL market more openness,equity and justice for protecting the rights and powers of farmers and co-operative organizations,and also reducing the transaction cost.Secondly,the establishment of transparent RCCL market trading platform.We should standardize the information disclosure,accept the social supervision of the public,and form a competitive and orderly RCCL market.So improving the information openness of transaction rules of RCCL is of great significance to cultivate the RCCL market.The third is to strengthen and expand the supervision and management of RCCL market.The transaction rules should strictly regulate the supervision methods in transaction,and the regulatory information should be synchronized with the electronic information platform.Finally,we should simplify the transaction process of RCCL market,and make full using of modern scientific technological tools to open the transaction process,and reduce the uncertainty of transaction and transaction cost,and then improve market transaction efficiency.