Abstract: The flourish urbanization process and land transfer markets have changed the employment and revenue structure in China, thereby producing an impact on the production structure and factor configuration of farmers. Based on the 8,446 farmer sample data of 25 provinces, municipalities and autonomous regions from CFPS database in 2018, we divide farmers' agricultural production investment into two categories:liquid asset investment and fixed asset investment and then explore what impacts farmers' non-agricultural income and land transfer have on farmers' investment in liquid and fixed assets. The findings are as follows. First, non-agricultural income has a significant negative impact on farmers' investment in liquid and fixed assets, and the impact on farmers' investment in short-term liquid assets is more significant. Second, the farmers from whom land is transferred out tend to reduce agricultural liquid and fixed asset investment, while land transfer-in has a significant positive impact on farmers' investment in both kinds of assets. Third, there is a significant endogeneity between non-agricultural income and land transfer, and if this is taken into account, land transfer-out has no significant impact on farmers' investment in liquid assets, but still has a significant negative impact on farmers' investment in fixed assets. By contrast, land transfer-in motivates land-receiving farmers to invest more in agricultural liquid and fixed assets.

Key words: non-agricultural income, land transfer, liquid asset investment, fixed asset investment