Differential analysis of the impact of adopting outsourced machinery services on land transfer between contracted and outsourced land-holding

The use of outsourced machinery services has significantly transformed agricultural production methods, leading to varying impacts on farmers’ land transfer behaviors. This study investigates the influence of outsourced machinery services on land transfer across different land ownership categories in China. Using data from the China Land Economic Survey (CLES), this research employs a two-way fixed-effects model. To address potential endogeneity, Propensity Score Matching (PSM) is applied, supplemented by validation through fixed and random-effects models. The results showed that the use of outsourced machinery services significantly reduces land transfer out by contracted land-holding farmers but has no substantial effect on land transferred in. Conversely, these services inhibit land transfer out by outsourced land-holding farmers while encouraging land transfer in. Furthermore, as the stages of outsourced machinery services increase, their adoption by contracted land-holding farmers significantly promotes land transfer in, whereas their impact on land transfer out for outsourced land-holding farmers becomes insignificant. This study offers valuable insights into how outsourced machinery services can be leveraged to facilitate land transfer and, consequently, advance agricultural development.