Indeed, cost-benefit analysis is the basis of decision-making for the transferees to adopt CTTs. Compared with the traditional agricultural production technology, CTTs such as straw mechanical returning generally need higher input, and its benefit from the current investment is divided into multiple periods, which indicates that the intertemporal attributes of current and future earnings need to be considered simultaneously by the transferees (Xu et al., 2018).
First of all, from the perspective of cost input of technology adoption, the transferees make the transfer decision according to the marginal cost and output of farmland input before transferring in farmland with compensation. When the marginal output of farmland input is higher than the transfer rent, the transferees will choose to transfer into farmland, and vice versa. Therefore, the sum of their own and transferred farmland area will not exceed the optimal operation scale. At this point, they have the ability and willingness to seek improvements in production technology through the realignment of capital, labor and other factors on the land transferred. However, the transferees of free circulation can obtain farmland without paying rent, and their transfer-in area is not determined by the balance of rent, which often exceeds its optimal operation scale. Therefore, it is difficult to fully match farmland with other production factors such as labor. Due to the law of diminishing marginal returns in scale expansion (Wu et al., 2011), the transferees of free circulation may still invest in production following previous experience, as measured by cost-benefits. The operation itself is extensive, which limits the transferees’ ability to invest in CTT on plots. Even if the transferees who transfer farmland without compensation have certain investment capacity, they are more inclined to adopt technology on their own plots rather than on the transfer-in plots due to different guarantee effects of property rights (Wang et al., 2020).
Secondly, from the perspective of current income, in the paid circulation, the transferees need to bear the transfer rent and face the possible fluctuation of the rent, and thereby transferees have the motivation to seek production improvement through technological progress to cover the rent cost and ensure the current income. However, in the free circulation, the transferees can easily be assured of their current earnings and expected profits by virtue of the depressed rental cost, so they may lack the willingness to improve production. More importantly, since the current income is easier to be obtained, the real price of farmland is underestimated for the transferees who obtain farmland for free, resulting in that the relative price of farmland and other factors such as labor cannot reflect its scarcity (Wei et al., 2021). The theory of induced technological change holds that the relative price among factors is an important signal to reflect the resource endowment and then guide the technological progress and choice (Sukejiro, 2000). In other words, the absence of rent in free circulation weakens the price signal function of rent, thereby reducing the willingness of the transferees to choose CTT for production improvement.
Finally, from the perspective of expected earnings, property rights theory demonstrates that property rights determine the distribution of future multi-period income of land (Zhong et al., 2009). Stable property rights contribute to the formation of long-term expectations, thereby promoting farmers’ soil conservation investment (Besley, 1995; Lovo et al., 2016). Due to the intertemporal nature of CTT, whether the transferees can obtain all future benefits will directly affect their willingness to adopt technology. It can be seen that clearer rights boundary and longer transfer period can effectively encourage the transferees to adopt CTT (Lu et al., 2019). A large number of literatures believe that the purpose of the transferors not charging rent in the free circulation is to reduce the risk that the farmland cannot be recovered (Qian et al., 2018; Macours, 2014; Wang et al., 2015), or to achieve more flexible control of farmland afterwards (Qian et al., 2018). That is to say, the free transfer can be regarded as the game between the two transferring parties on the terms, control rights and rents. In most cases, no written contract or specific period will be signed in the free circulation (Chen et al., 2019; Wang et al., 2015), and the transferors may request to recover farmland at any time. This will directly cause the transferees unconvinced of obtaining the future income. Meanwhile, the difference of discount rate of different transferees will also lead to different expected profits (Liebenehm et al., 2014), which reflects the difference of adoption behavior of CTT. Compared with the paid transfer, the discount rate of the transferees in the free circulation is higher due to the uncertainty of future income caused by the unstable management right. The transferees who transfer for free have a low present value of discounting the future income of adopting CTT to the current period because of the high discount rate. And the net present value is lower after deducting the investment cost of potential technology adoption, so the willingness to adopt technology is impeded.
Accordingly, hypothesis 1 is proposed: Compared with the transferees in the paid transfer, the transferees in the free transfer is less willing to adopt the CTTs after comprehensively considering the cost input, current and expected benefit of technology adoption.
Further, among the many types of CTTs available, farmers will make choices in order to maximize the benefits of adopting decisions based on their own factor endowment constraints (Popkin, 1979). CTTs can be divided into labor-saving and labor-intensive technologies in light of the difference of labor input (Cao et al., 2019). For example, farmers who adopt straw mechanical returning technology only need to invest in the purchase of corresponding services without additional labor time. However, if farmers adopt soil testing and formulated fertilization technology, they need to increase the number of fertilization and invest additional labor time. According to the theory of factor-induced technological innovation, the scarcity of land, labor, capital and other resources available to farmers is the driving force for their cognitive demand for agricultural technology (Hayami and Ruttan, 1985), according to which they will choose technologies with different labor attributes.
Generally speaking, the transferees in the free circulation prefer to adopt labor-saving technology rather than labor-intensive technology. The possible reasons are that, on one hand, the transfer-in area of the transferees in the free circulation is not regulated by rent, so it may exceed its optimal operating scale, which will lead to a decrease in the allocation of family labor force on the farmland per unit area. The shortage of labor force makes the transferees only maintain the basic labor time of agricultural production (Yang et al., 2015). On the other hand, free transfer is generally accompanied by labor exchange. It is often necessary for the transferees to provide care for the transferors in daily life after obtaining farmland for free (Chen et al., 2019), which indicates that the free transfer will actually disperse part of the transferees’ working time in the form of human exchange and further lead to the tension of the working time of the transferees’ family. At the same time, considering that the current agricultural opportunity cost increases year by year, the labor factor of the transferees in the free circulation is relatively scarce. Therefore, the transferees who transfer in farmland for free are more reluctant to adopt labor-intensive technologies.
Accordingly, hypothesis 2 is proposed: Compared with labor-saving CTT, the transferees in the free transfer are less willing to adopt labor-intensive CTT.