The study uses nationally representative panel datasets on rural Chinese households to examine the interrelationship between smallholders’ participation in land rental markets and their agricultural commercialization, while also evaluating the interactive effects of these market-oriented farming practices on agricultural land and labor productivity. We adopted bivariate tobit model, fixed effects models and instrument variable methods to solve the endogeneity problems. Results reveal a mutually reinforcing relationship between farm households’ land rental area and commercialization decisions. Furthermore, renting in farmland improves agricultural labor productivity while reduces land productivity. Agricultural commercialization has significantly improved farm households’ land and labor productivity. Finally, commercialization could positively moderate the effect of land renting on agricultural productivity. Policymakers should design policies and strategies to promote land rental market development and farmers’ commercialization that could improve labor and land productivity.
