Tenurial security and agricultural investment Evidence from Vietnam

Marc F Bellemare, Kenn Chua, Julieth Santamaria, Khoa Vu

Research output: Contribution to conferencePaper

Abstract

This study has been prepared within the UNU-WIDER project on 'Structural transformation and inclusive growth in Viet Nam'. Abstract: In Vietnam, all lands belong to the state, who assigns usufruct rights to those lands to individuals and households. In 1993, the state gave 20-year usufruct rights to growers of annual crops, and 50-year usufruct rights to growers of perennial crops. In 2013, as the usufruct rights of growers of annual crops were set to expire, the Vietnamese government passed a law-the Land Law of 2013-that extended the usufruct rights of all landowners by 50 years. We exploit this largely unanticipated shock to study the effect of the Land Law of 2013 on the investment behaviour of growers of annual crops. Using a difference-indifferences design, we find that the Land Law of 2013 is associated with a higher likelihood of investment in irrigation technology or soil and water conservation, but not other types of investment. Our results are robust to controlling for endogenous switching from annual to perennial crops, and our data support the parallel trends assumption. Our results also suggest that the long-term effects of the Land Law of 2013 are larger than its short-term effects. Acknowledgements: We thank UNU-WIDER for supporting this research project and for giving us access to the VARHS data. We also thank conference participants at the 2018 Waves of VARHS Data project workshop for useful comments and suggestions. All remaining errors are ours.
Original languageEnglish (US)
StatePublished - 2018

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land law
Vietnam
evidence
investment behavior
irrigation
research project
conservation
water
Law
trend

Keywords

  • investment
  • land
  • land rights
  • O12
  • O13
  • Q15
  • Vietnam JEL classification: K11

Cite this

Tenurial security and agricultural investment Evidence from Vietnam. / Bellemare, Marc F; Chua, Kenn; Santamaria, Julieth; Vu, Khoa.

2018.

Research output: Contribution to conferencePaper

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AU - Vu, Khoa

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N2 - This study has been prepared within the UNU-WIDER project on 'Structural transformation and inclusive growth in Viet Nam'. Abstract: In Vietnam, all lands belong to the state, who assigns usufruct rights to those lands to individuals and households. In 1993, the state gave 20-year usufruct rights to growers of annual crops, and 50-year usufruct rights to growers of perennial crops. In 2013, as the usufruct rights of growers of annual crops were set to expire, the Vietnamese government passed a law-the Land Law of 2013-that extended the usufruct rights of all landowners by 50 years. We exploit this largely unanticipated shock to study the effect of the Land Law of 2013 on the investment behaviour of growers of annual crops. Using a difference-indifferences design, we find that the Land Law of 2013 is associated with a higher likelihood of investment in irrigation technology or soil and water conservation, but not other types of investment. Our results are robust to controlling for endogenous switching from annual to perennial crops, and our data support the parallel trends assumption. Our results also suggest that the long-term effects of the Land Law of 2013 are larger than its short-term effects. Acknowledgements: We thank UNU-WIDER for supporting this research project and for giving us access to the VARHS data. We also thank conference participants at the 2018 Waves of VARHS Data project workshop for useful comments and suggestions. All remaining errors are ours.

AB - This study has been prepared within the UNU-WIDER project on 'Structural transformation and inclusive growth in Viet Nam'. Abstract: In Vietnam, all lands belong to the state, who assigns usufruct rights to those lands to individuals and households. In 1993, the state gave 20-year usufruct rights to growers of annual crops, and 50-year usufruct rights to growers of perennial crops. In 2013, as the usufruct rights of growers of annual crops were set to expire, the Vietnamese government passed a law-the Land Law of 2013-that extended the usufruct rights of all landowners by 50 years. We exploit this largely unanticipated shock to study the effect of the Land Law of 2013 on the investment behaviour of growers of annual crops. Using a difference-indifferences design, we find that the Land Law of 2013 is associated with a higher likelihood of investment in irrigation technology or soil and water conservation, but not other types of investment. Our results are robust to controlling for endogenous switching from annual to perennial crops, and our data support the parallel trends assumption. Our results also suggest that the long-term effects of the Land Law of 2013 are larger than its short-term effects. Acknowledgements: We thank UNU-WIDER for supporting this research project and for giving us access to the VARHS data. We also thank conference participants at the 2018 Waves of VARHS Data project workshop for useful comments and suggestions. All remaining errors are ours.

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