# Written or oral? The impact of social network relationships on land transfer contract choices: Evidence from the latest survey data in China

## TL;DR

This study explores why many Chinese rural households prefer oral over written land transfer contracts, finding that close social ties and trust play a key role.

## Contribution

The paper introduces a novel theoretical framework combining social network and differential order theories to explain oral contract preferences in rural China.

## Key findings

- Closer kinship and geographical ties increase the likelihood of oral land transfer contracts.
- Social trust strengthens the influence of social networks on contract choices.
- Higher education levels reduce the tendency to use oral agreements.

## Abstract

Facilitating the transfer of rural land is a significant initiative by the Chinese government aimed at optimizing the allocation of land resources and promoting agricultural modernization. Among these initiatives, encouraging farmers to establish written contracts is essential for maintaining order in agricultural land transfers and promoting large-scale land management. However, a substantial number of rural households in China still transfer land through oral agreements, and the underlying reasons behind this practice remain insufficiently understood. This study is grounded in social network theory and the theory of differential order. Utilizing questionnaire survey data from 636 rural households in North China collected in 2024, we examine the influence of social network relationships, such as kinship and geographical ties, on the choice of agricultural land transfer contracts. Our findings reveal that social network relationships significantly impact the choice of agricultural land transfer contracts. The closer the kinship and geographical ties, the more inclined farmers are to transfer land through oral agreements. Additionally, we uncover the moderating roles of farmers’ social trust and education level. Social trust amplifies the positive impact of social network relationships on the formation of oral agreements, while a higher level of education diminishes this effect. This paper provides a theoretical explanation for the widespread practice of oral contracting in rural land transfers in China. It also offers policy recommendations for the Chinese government.