The Mechanism Of Rural Financial Evolution Supporting Economic Growth In The Market Processing —Theoretical And Empirical Analysis

After thirty years of reform and opening, China has established a market economy as the basis of economic system, with the deepening of the process of market, China’s economic development has made remarkable achievements.But China’s regional and urban-rural development gap is still very huge, and even in some areas has continued to expand.Especially in China’s vast rural areas, the level of economic development and deepening of the market is more obvious. Under the background of rapid social transformation, the rural economic resources and factors are involved in the process of marketization, and the development of the rural economy has long been restricted by "financial repression". Its development level and quality lags far behind the whole country.Market proposition is the successful experience of our country after a long period of development, through the deepening of the reform of the rural areas of the market economy, the establishment of the modern market system is the key to solve the problem of rural economic development. And the process of market deepening, how to mobilize and achieve the rational allocation of resources, we need to establish a reasonable allocation of resources through the rural financial system. So the research of this paper focuses to explore the mechanism and effect of rural economic growth through the relationship between the deepening of the rural market and financial development.And to form a positive interaction between market deepening, financial evolution and economic development.Firstly, through this paper we can review the related theories of market deepening, financial evolution and economic growth, and also find the relationship between the three factors.In the comprehensive study of the relevant scholars, this paper establishes a mode to analysis China’s rural financial development. Take the market deepening as a clue, combing the relationship between rural economy and finance in China since modern times, the market is the key to influence the development of rural economy and finance.Under the consideration of theory and history, the basic mechanism of the financial development under the influence of the economic growth is studied with the investment of the endogenous market, financial development and economic growth.Based on this analysis, the thesis analyzes the different effects of the financial scale, structure and efficiency on economic growth, and finally gets the five proposition of the rural market, financial development and economic growth:(1) In the process of the evolution of the financial market, specialization and division of labor under different transaction efficiency influence the degree of market deepening, and have an impact on the development and evolution of rural finance. From the perspective of transaction efficiency, the relationship between market deepening and financial evolution is analyzed, and the process of financial evolution of professional investment market is described, which is based on the effect of transaction efficiency and market deepening.(2) With the deepening of the market and the development of rural finance, the long-term growth of rural economy will be formed. Based on the positive interaction mechanism between market deepening, rural financial development and economic growth, the analysis of the interaction between the efficiency of the transaction and the deepening of the market, with the emergence of specialized and division of labor, will produce the results of the rural financial development, the per capita income level, and the rural economic growth. Along with the continuous improvement of the level of per capita income, it will further promote the upgrading of the level of specialization and division of labor, and eventually form the internal mechanism of market deepening and financial evolution.(3)In the process of market deepening, with the-evolution of the scale of rural finance, it will bring about the increase of per capita capital accumulation level and per capita income level, thus forming the function mechanism of the rural financial scale evolution and the rural economic growth. With the increase of the degree of marketization, the transaction scope and the flow range of the various factors are improved, and the capital and income level of the rural per capita is increased.(4) The difference between the regional market deepening, has brought about the change of the financial structure, causing the change of the proportion of industrial structure in different regions, and ultimately the quality of rural economic development. In the background of China’s transformation and market deepening, the difference of market deepening will have an impact on the regional industrial structure in terms of financing structure, and only with higher efficiency and resource allocation efficiency, can we adapt to the process of the market and get more elements.(5) Market deepening will bring technological innovation and technological progress, and ultimately affect the rural economic development, with the deepening of the market, further improve the level of division of labor, along with the emergence of technological progress and innovation, the emergence of specialized investment market, further expand the investment in technology innovation, so that the formation of market deepening, financial development and technological progress of rural economic development is a positive feedback mechanism.In the following chapters, the thesis carries on the test of five propositions through constructing the index system of the rural market deepening, the comprehensive index system of rural financial development, using the relevant measurement and empirical tools. Through the empirical model, it further proves the influence of market deepening on rural financial evolution and rural economic growth. Based on the this analysis, the thesis has completed the theoretical analysis and empirical test of the five propositions.The innovation of this paper is that, according to the actual situation of rural development in China, the paper introduces a new model of rural financial development, which is based on the analysis of the difference between the rural financial development and the rural financial development. Second, combined with the existing market deepening theory, the use of relevant indicators data, through the principal component method, a more scientific analysis of the rural market to deepen the index system, which involves the three indicators reached 18, covering the relevant aspects of the rural market. Different from the existing literature, this paper has made improvement and innovation in the index system and statistical tools.