Empirical Analysis of the Relationship Between Development of Rural Financial System and Rural Economic Growth

Empirical Analysis of the Relationship Between Development of Rural Financial System and Rural Economic Growth

JIAO JINPENG

Harbin University of Commerce MBA MPA Education Center, Harbin, China

Page: 
464–471
|
DOI: 
https://doi.org/10.2495/SDP-V9-N3-464–471
Received: 
N/A
| |
Accepted: 
N/A
| | Citation

OPEN ACCESS

Abstract: 

This article investigates the relationship between the development of the rural financial system and the ACP economic growth. The vector error correction model, co-integration method and impulse response function are used to analyze the data. This article does the systematic empirical and quantitative research from the three aspects of the financial system: its scale, structure and efficiency. This research shows that it has the equilibrium co-integration relationship and long-term one-way Granger causality between them. That means rural financial system efficiency, rural financial deepening, and improvement of the structure of the rural financial system can increase the growth of rural economy, agricultural development and peasants’ income significantly. Therefore, it is necessary to increase the efficiency of rural financial institutions and to improve the rural financial system structure and security of the rural financial system to maintain rural economic growth, agricultural development and farmers’ income.

Keywords: 

Rural financial system, ACP economic, VEC model, co-integration

  References

[1] Han, T., Financial ecological environment influence on the development of financial markets. The Journal of World Economy, 3, 2008.

[2] Nie, H., The empirical analysis of rural financial development and economic growth in Heilongjiang province. Farm Economic Management, 3, 2009.

[3] Yu, Y., Research on the relationship between rural financial development and rural economic growth based on VAR models. Economic Problems, 12, 2011.

[4] Ding, Z., Does rural finance efficiently improve the development of rural economic in China. Issues in Agricultural Economy, 9, 2012. doi: http://dx.doi.org/10.2307/1912517

[5] Huang, Y., Problems of deepening reform of the rural financial system. China Rural Finance, 1, 2013.

[6] Dickey, D.A. & Fuller, W.A., Likelihood ratio statistics for autoregressive time series with a unit root. Econometric, 49, pp. 1057–1072, 1981.

[7] Engle, R.F. & Granger, C.A.J., Co-integration and error correction: representation, estimation and testing. Econometric, 55, pp. 251–276, 1987. doi: http://dx.doi.org/10.2307/1913236

[8] Feldstein, M.S. & Stock, J.H., The use of a monetary aggregate to target nominal GNP. Monetary Policy, ed. N.G. Mankiw. University of Chicago Press: Chicago, 1994.