Livelihood Capital, Risk-Bearing Capacity, and Land Transfer-Out Decisions: Evidence from China

Farmers’ land transfer-out decisions involve weighing benefits against risks. However, existing studies tend to examine the separate effects of livelihood capital or risk perception on land transfer, overlooking whether and how risk-bearing capacity mediates the relationship between livelihood capital and transfer-out decisions. Moreover, most research treats land transfer-out as a simple binary choice (transfer or not), ignoring that farmers also decide to whom to transfer—a choice that affects both risk and return. This study investigates the effects of livelihood capital and risk-bearing capacity on these decisions, drawing on 2021 China Land Economy Survey data. Logistic regression and mediation models are employed to assess both direct and indirect impacts. The results indicate that natural and financial capital represent the most binding constraints on farmers’ livelihood capital. Higher levels of livelihood capital increase the likelihood of land transfer-out, with this effect operating partly through enhanced risk-bearing capacity. When selecting a transfer object, farmers with greater livelihood capital show a preference for village collectives over other farmers, cooperatives, or enterprises—a choice reflecting a trade-off between expected returns and perceived risks. Risk-bearing capacity partially mediates the effect of livelihood capital on the choice of village collectives and other farmers, but does not play a mediating role in transfers to enterprises or cooperatives. These findings suggest that policies designed to facilitate land transfer-out should consider not only the enhancement of farmers’ livelihood capital endowments but also the strengthening of their risk-bearing capacity. China still needs to strengthen the organizational framework for rural land transfers and improve the rights protection mechanisms for such transfers. This will reduce the risks associated with land transfer-out for farmers, encourage more proactive and market-oriented decision-making, and ultimately improve land transfer efficiency.