Opening the Village Door: China's Agricultural E‐Commerce Facilitates the Transformation of Land Rental Markets

ABSTRACT High transaction costs and information asymmetry in developing countries not only constrain land transactions but also limit them among village acquaintances, hindering the marketization of land. E‐commerce, emerging as a new phenomenon in rural areas, has the potential to disrupt this status quo. Drawing on nationally representative data from the 2017 and 2019 China Rural Household Panel Survey, this study employs a panel Tobit model and propensity score matching approach to examine the relationship between agricultural e‐commerce and the transformation of land rental markets. Our findings reveal that agricultural e‐commerce is associated with higher land rents by attracting agricultural operators and enhancing agricultural profitability, thereby facilitating the transformation of land rental markets. The association is further strengthened by road infrastructure, with better road infrastructure enhancing the positive link between agricultural e‐commerce and land rents. Moreover, the correlation between agricultural e‐commerce and land rents is more pronounced in households with more female members and weaker political and economic ties, reflecting the value of agricultural e‐commerce in promoting inclusive development. In addition, agricultural e‐commerce is positively influenced by the formalization of land leases through written contracts. These findings highlight the importance of agricultural e‐commerce in fostering the development of the land rental market in China and other developing countries, emphasizing the need for policies to support its continued growth.