2.1.1 Land transfer.

Land transfer is an important issue that has drawn attention from academic circles of agricultural economy and rural development in China. Given the increasingly prominent contradictions between the traditional characteristics of small-scale agricultural production in China and the improvement in agricultural labor productivity, as well as the increase in farmers’ income and the increase in agricultural investment scale, agricultural land transfer has become an important way for farmers to expand their scale of operation and increase their income, which has received extensive attention from scholars [15]. In the existing analysis on the determinants of farmland transfer, it can be classified into the following six categories.

1. Property rights security. The unsafe property rights of farmland restrict the migration of rural labor force to cities and hinder farmers’ participation in the farmland transfer market. Some scholars have found that the security of property rights not only plays a positive role in the transfer, that is, the confirmation of property rights does not necessarily change the preference of farmers, so it will not significantly affect the transfer of farmland [16], or that property right confirmation strengthens the “endowment effect” of farmers on farmland, promotes the increase of land lease price, and has a certain inhibitory effect on farmers’ participation in land transfer [17,18].
2. Family endowments and peasant household characteristics. Some preliminary theoretical studies show that a higher ratio of non-agricultural employment of farmers can promote the transfer of agricultural land, and the free labor market will drive land leasing [19]. After that, through empirical research on the survey data of different regions, scholars found that off-farm employment or farmers’ choice of part-time employment itself does not necessarily lead to farmers’ participation in land transfer [20], and the relationship between them varies with the motivation of off-farm employment [21]. Determinants of land transfer include farmers’ characteristics variables, farmers’ own characteristics (gender, age, education level, and ability), and the characteristics of households (family population, workforce, property), farmers’ attitudes, rural social security cognition, cognitive, and farmers’ financial services such as cognitive policymaking [22].
3. Transaction costs. B.L. Luo extended the Coase Theorem, and combined with case analysis, found that the farmer’s endowment effect in the agricultural land transfer market has personality, survival, and emotional dependence, which greatly increases transaction costs and hinders land transfer [23].
4. Policy interventions. Existing studies have found that the granting of subsidies to the original contractors under the current subsidy policy reduces the probability of farmers’ participation in farmland circulation, and the government’s agricultural support policy of increasing agricultural income conflicts with the policy goal of promoting farmland circulation. In addition, farmers are subject to village-level control during farmland circulation, which significantly restrains farmland circulation [24].
5. Social networks. Based on the special national conditions of farmland in China, scholars have discussed in detail the role of trust, reputation, and social networks in farmland transfer from the perspective of sociology. Farmland is not a general commodity, and farmers’ dependence on land makes the functional attribute of land security closely related to the choice of objects for farmland transfer. Spatial distance, whether natural or social distance, causes farmers to choose to sign relational contracts with relatives and neighbors [25–27]. In short, rural land transfer behavior has the embeddedness of social relations.
6. Market factors. The market price of agricultural products affects the decision-making of farmers’ land transfer behavior [28]. However, these studies still have the following shortcomings: first, the research is mostly focused on the micro level, the analysis of stakeholders is not comprehensive enough, and the analysis of other land transfer participants is lacking; second, village committees, as grassroots self-governing organizations in rural China, as well as nodes of social and economic life in rural China, still have blind spots and deficiencies in quantitative analysis; third, land transfer as a top-down policy, and regarding the transfer of the main body of the utility and cost analysis, there are significant deficiencies.

2.1.2 Rural finance.

Another group of studies related to this study is rural finance. The research contents of this branch of literature can be divided into three categories.

1. Analysis of the current situation of rural finance, including village income expenditure and village debt. First, in the financial year, the village organization itself receives income. We include the village set-aside, the agricultural tax to add, the land contract cost (including mountains, forests, surface water), village enterprise fees, expropriate land compensation, village assets, family planning fines, and other income; village expenditure indicates the cost that the village organization must pay to maintain the normal operation of the village, which can be divided into the village organization operation expenditure, public investment expenditure, and debt repayment expenditure. The income and expenditure of village committees have obvious changes before and after the reform of agricultural tax. The total income of the village increased slightly, while the self-income ability obviously decreased; the total expenditure had a large proportion of continuous increase, while the structure of expenditure was more balanced [29]. Research on village-level debt can be divided into the following three types. First, there is the definition and current situation of village-level debt. Village-level debt refers to the village committee or village collective economic organizations in the management of public affairs, created during the process of economic development of all kinds of public debt management and business debt. It has existed since the 1980s, increased rapidly in the early 21st century, and is large, with varying levels of debt burden between different regions and village organizations [30]. Second, village-level debt has both positive and negative effects. A certain amount of debt is conducive to maintaining the normal operation and economic development of the village, especially for those projects that produce long-term economic and social benefits, but whose costs and expenditures are concentrated in the temporary period, which is indeed necessary [31]. However, when the amount of debt is too heavy or the village committee cannot repay the debt, this problem-heavy debt will cause great harm to the villagers, village cadres, township enterprises, financial system, county and township governments, and social stability [13,32]. Third, the formation of village debt can be attributed to four aspects: the imbalance of the “top-down” governance mechanism of the village, the large number of enterprises set up for the purpose of economic growth, the lack of public finance, and the agricultural tax [33].
2. Inadequacy of village financial management. The “village township fiscal tube” to realize the common practices of village-level financial supervision uses the many financial books and documents in the villages and towns dealing with specialized accounting management, recording the financial revenues and expenditures by the groups reported vouchers, after review by the public, but the lack of legal basis in the practice of the management system is not sound, but violations do not effectively restrict the village cadres, and because of new forces in village finances and the lack of a high-quality, talented team, many loopholes exist in village financial management [34,35].
3. Resolution of village financial problems. The solution to the village financial problems can be summed up in two aspects. First, the higher-level government actively guides and carefully divides up the debt responsibilities of local governments at all levels. On the premise of not reducing the debt service cost too much, the village committees that resolve the debt are encouraged by the mode of reward [36,37]. Second, an effective mechanism should be established to solve the existing debt by classification. For example, replacing external debt with internal debt to change the debt structure, or reducing debt by a nonlinear path can reduce welfare costs [38,39]. Moreover, a mechanism to eliminate the growth of debt should be established to increase the coverage of public finance in rural areas. At the same time, the village committee should strengthen the management of cadres and grassroots democracy construction, cut down on unreasonable expenses, establish accountability and village affairs disclosure systems, and reduce the growth of corruption in the village and the formation of a shadow economy [40,41]. The other solution would be the perfection of the market mechanism, which could reduce the credit risk of the system, improve the credibility of regional borrowers, and increase the circulation of market loans [42].

At present, there are still the following shortcomings in the study of village finance: first, the content of the study remains in the formation of fixed debt, with less analysis of its actual impact, if it is mentioned at all, and more focus on negative effects; second, due to the lack of quantitative data, research remains in the descriptive or case analysis mode.

2.1.3 Individuals’ financial situation.

The third group of studies focuses on the impact of an individual’s financial situation on his or her economic behavior—but this affects not only families, but also companies and governments. For households, the heavier the financial burden (the greater the debt pressure), the more significantly there will be a decrease in household expenditure [43]; at the same time, the debt repayment pressure will become a new driving force to improve productivity and profitability, which can be regarded as a major channel of rural capitalist reproduction [44]. For companies, short-term debt can help them make optimal use of leverage, restrain, and supervise the incentive effect of reducing excessive investments in low-growth enterprises, and thus help enterprises make better investment decisions [45]. For the government, a large number of theoretical studies believe that government debt will lead to higher private borrowing costs and greater uncertainty or expectation, and have a negative impact on economic growth [46,47]; however, G. Mathieu took 28 manufacturing industries in 39 developing countries and developed countries as samples and found that government debt could promote economic growth by increasing the supply of current assets or collateral through research on the difference-in-differences (DID) model [48]. Therefore, debt repayment is regarded as a channel for financing and reproduction.

Overall, both rely on theoretical framework mainly based on new institutional economics, especially in the building of new institutional economics and transaction cost economics, from property right economics to property uncertainty, and transaction costs as the foundation upon which to analyze the influence of farmers on the circulation of farmland, which combines the perspectives of behavioral economics, economics, and public economics structures, deals with the population of farmers’ social economic status and the cognitive characteristics of bounded rationality, farmers’ individual characteristics, farmers’ family characteristics, farmers’ perception of life, the cognition of rural social security, the cognition of rural land policy-making, the cognition of farmers’ financial services, and the influence of government intervention on these factors. However, the current research ignores the fact that if circulation occurs in rural areas, it is bound to be under the jurisdiction and influence of village organizations, and village committee play an important role. However, both the current theoretical analysis model and the empirical analysis framework ignore the elements of joining village committees (rural grassroots community self-governing organizations). In particular, there is no targeted analysis of the impact of village collectives on the development of rural land transfer markets from the perspective of village-level finance or village-level debt, especially the lack of empirical and empirical analysis based on the support of field data. However, most of the research on village-level debt is still in the descriptive analysis and case analysis phase, and it is seldom applied in empirical studies.

In the existing domestic and foreign literature on factors influencing land transfer, there is a lack of village debt as an influencing factor. At the same time, the impact of non-governmental organization (NGO) debt on land transfer has seldom been analyzed in the literature. Therefore, this paper uses county-level panel data of village debt and land transfer from the Zhejiang Provincial Department of Agriculture to analyze the impact of village debt on the land market from the perspective of village committees’ intervention in the land transfer market, and tests whether the mechanism of village committees’ intervention in the land transfer, which supplements existing research on the financial impact of autonomous organizations, has important academic significance; at the same time, it provides a new idea for policy-makers to resolve the “invisible” village debt and realize the “elimination of weak villages.”

2.2.1 The role of village committee in land circulation.

As a grassroots social governance organization, the village committee is likely to play a role, perhaps even an important one. According to the existing literature, village committees, as intermediaries, play three different roles in the transfer of agricultural land. First, village committees, as service providers, not only take on organization and coordination, but also exercise the functions of management and supervision. The village committee provides information on the inflow and outflow, provides the negotiation mechanism and a signing place for the circulation according to the actual situation, and manages the transaction [49,50]. Second, the village committee is a rational interest subject, that is, a group of people with self-interests that serve as a rational broker organization [51]. As rational actors, the motivation of the village committee to promote the transfer of farmland is based on the premise of the collective profit of the village, and even the behavior of grabbing “gray income” furthers the interests of farmers [52]. Third, the village committee bidirectional agent role not only makes the village committee village farmland change the financial situation of most of the farmers, it helps reduce the decision-making costs, increase its price negotiation ability, work with large agent enterprises, cooperate, and promote the main body of the land, thus accelerating the speed of the village of farmland circulation [53,54].

The discussion of “acquaintance society” in Chinese literature on rural sociology appears in the discussion of community governance in the international literature. Regardless of political economy or economic sociology, community governance has become the third major governance mechanism, alongside administrative governance and market governance. Bureaucratic governance is based on command and control and mainly occurs in a hierarchical system. In the context of Williamson, it is also called “hierarchical governance.” Market governance is a voluntary transaction between non-individual market entities, based on choice and competition. Community governance, based on commitment and compliance, occurs among closely related actors who coordinate their activities based on their commitment and compliance with certain common values and norms [55–57].

From the perspective of community governance, it is natural that the behavior of the land market, especially the behavior of rural farmland transfer in China, is embedded in the rural social network and is affected by the rural governance situation. In fact, neo-institutionalists, neo-evolutionists, and neo-economic sociologists do not believe that the market, administrative, and community mechanisms are governance mechanisms that can perfectly replace each other. The relationships among the three may have both mutual inhibition and complementary embeddedness. Because most of the contracts in which the market mechanism operates are incomplete, the community and market mechanisms are embedded and they support each other, which is actually a normal condition in social and economic life, rather than a manifestation of an underdeveloped market mechanism. At the same time, the maintenance of norms, the credibility of promises, and the implementation of supervision in the community mechanism, just like the implementation of contracts in the market mechanism, all need administrative power to play a role. In the countryside, the village committee must play an active role in rural social and economic life, no doubt in many ways. In the economic life of rural society, farmland circulation is obviously not a trivial matter.

As mentioned above, it is common for the village committee to intervene in transfer as an intermediary, an independent interest subject, or a two-way agent. The extent and depth of the involvement of village committees are likely to be influenced by the state of rural economic governance, one of which is the financial situation, including debt. When faced with the pressure of debt, it is possible for village committees to promote the rise of large agricultural producers or large-scale agricultural enterprises by promoting the transfer of agricultural land.

2.2.2 Theoretical model of village committees’ intervention in land transfer.

As a grassroots autonomous organization, village committees intervene in the land market to gain profits not only for their own sake, but for the purpose of maximizing rural social welfare based on the village unit and achieving this goal by providing public goods, y. Therefore, this paper proposes a theoretical model of the village committee’s intervention in land circulation.

The basic goal of economic behavior is to obtain income, so the following assumptions are made in this model: first, the village committee can obtain certain income by promoting land circulation; second, the promotion of land transfer by the village committee is also accompanied by certain policy costs and transaction costs, such as policy risks and negotiation risks. The cost of the policy risk is fixed, whereas the transaction cost caused by the negotiation risk depends on the internal characteristics of the village committee. x means the transfer of land area promoted by the village committee, x>0x>0; f(x) means revenue that the village committee receives from intervention, f(x)′>0>0; C means cost of policy risk that is not influenced by x; the transaction cost of negotiation risk is M(n); n means that the internal characteristics of the village committee are not affected by x. Denote w(y) as a rural social welfare function, and w>0′>0, and let Z be a dummy variable indicating whether the village committee promotes land transfer, Z∈{0,1}∈{0,1}, 1 means push, and 0 means vice versa; let D be the financial budget of the village committee, the higher the debt of the village, the less the financial budget. The village committee then faces two interrelated choices:

1. When the village committee chooses to promote the transfer of land (i.e., Z = 1), it will bring some benefits f(x)f(x), as well as cost C and pay M(n).
2. When the village committee chooses to promote the transfer of land (i.e., Z = 1Z = 1), the village committee promotes the following:

If the village committee promotes land transfer, the village committee needs to provide public services for the village under the existing budget and maximize the social welfare of the village. The objective function is: (1) (2)

Whether the village committee chooses to promote the transfer of farmland depends on the social welfare that this measure will bring.

If the village committee does not promote land transfer (Z = 0), the maximum social welfare function of the village is w(D); if the village committee decides to promote land transfer (Z = 1), the maximum social welfare function of the village is w(D+f-C-M(n)). If and only if the social welfare (w(D)) that the village committee chooses not to promote agricultural land transfer is lower than the social welfare (w(D+f-C-M(n))w(D+f-C-M(n)) that the village committee promotes agricultural land transfer, then the choice to promote agricultural land transfer is the optimal strategy for the village committee. That is: (3) (4)

The area of land involved in the circulation (xx^R)x^R) increases with a decrease in the budget of the village committee (D). Once the village committee chooses to adopt the strategy of promoting the circulation of land (Z = 1) to alleviate financial difficulties, the higher the village-level debt (D ↓↓), and the greater the circulation area (i.e., the optimal area, xx^R), the financial balance must be maintained. Therefore, when the debt of a village is higher, it has a lower disposable budget. To relieve the debt pressure and change the current situation, the village committee is more likely to promote the circulation of land to relieve financial difficulties, and the higher the debt is, the larger the circulation area that will be promoted.

Based on the above theoretical model analysis, this paper proposes the following hypotheses:

1. Hypothesis 1: Village-level debt is one of the reasons for the village committee to intervene in land transfer; and
2. Hypothesis 2: There is a positive correlation between village-level debt and rural land circulation, that is, village-level debt has a significantly positive promoting effect on rural land transfer.