Empirical Study Of Financial Development And Entrepreneurship In Rural China

In1912, Schumpeter, the founder of entrepreneurship research, put forward the view that the nature of finance is to identify and finance entrepreneurs with the best spirit of innovation, thus enhance the economic growth. After several decades, scholars once again drew attention on the relationship between Financial Development and Entrepreneurship,which led the theoretical and empirical study of Financial Development back to Schumpeter's statement on the nature of finance. Based on the newest theoretical analysis framework of Financial Development, Entrepreneurship and Economic Growth, this paper explored how to change the thinking of rural finance development to better support Entrepreneurship and farmer's undertaking activities in rural areas, enhance the development of rural economy and increase rural income level, and in the end realize the transformation of the dual structure between urban and rural economy from both the theoretical and empirical aspects.Against such theoretical background and practical significance, the second chapter first reviewd and evaluated current rural financial theories, and then examined and analyzed them systematically based on the newest theoretical analysis framework of Financial Development, Entrepreneurship and Economic Growth. After that, the paper explained various approaches to support entrepreneurship through financial development and pointed it out that "Only if financial development supports the undertakings and innovations of entrepreneurs, can it best promote economic growth. The development of financial market should return to the nature of supporting Entrepreneurship." Finally, this chapter reviewed the current thinking of rural financial reform and development based on the newest theory of Financial Development.The third chapter systematically reviewed the history and current status of rural financial reform and development of China. In the mean time, it conducted a systematic calculation and evaluation of undertakings in rural areas. In the end, it disclosed the influence of financial market underneath the variation of Entrepreneurship and undertakings in rural areas from the angle of rise and fall of rural financial market.Chapter four reviewed current rural financial theories and practices of rural financial reform of China, analyzed whether reral finacial development benefits the cultivation of rural entrepreneurship and encourages undertakings and innovation. Through construction of relavant theoretical and econometrics model, and using the Provincial panel data of China since2006, we analyzed the relationship between rural financial development and entrepreneurship and spirit of innovation in rural areas. The result showed that the new round of rural financial market reform exhibited obvious promotion effect on the spirit of innovation of rural entrepreneurs, yet with relatively less support for the promotion of entrepreneurship of rural areas. Finally, this chapter put forward suggestions on future rural financial reform.Chapter five analyzed whether financial constraints in rural areas have significant influence on the undertakings in rural areas and the internal working mechanism in the micro level. We first built the theoretical analysis framework of rural career-change behavior (self-employment undertakings) under the financial constraints, and then used the micro data of The China Health and Retirement Longitudinal Study (CHARLS) to verify the relationship between financial constraints and undertaking behavior and scale in rural areas (including employment scale and income scale). Thus we analyzed whether financial constraints would hinder the development of entrepreneurship of rural enterpreneurs, or the promotion and creation of employment opportunities.