Study On Rural Financial Development

Rural financial development must be adapted to rural economic duality, which meets the demand for homogenous economy .In this dissertation, we analyze the objective principle of rural financial development and propose the approach of reform of rural financial system in virtue of the second-generation financial development theory and institutional transformation theory. The dissertation mainly concerns the concept of rural finance and rural financial development, the relative model, the function and development mechanisms of rural finance.Firstly, we present the hypothesis that traditional department in rural economy are respectively coordinated with informal and formal finance. Consequently, the two meanings of rural finance can be inferred as follows: (1) financial support of rural economic development (from extensive viewpoint); (2) financial support of traditional department (from narrow viewpoint), namely, agricultural finance.Neoclassic microeconomics thinks divided labor is the centerpiece of economic development, which can be directly described as the emergence of efficient organism. Hence, financial organism will form when the divided labor of deposit savings and investment happens among the representative agents in economic department. Besides, with the divided labor deepening, the constant appearance of various financial organisms push up the economic growth by raising the proportion of savings funneled to investment, increasing the social marginal productivity of capital, or influencing the private saving rate. In turn, the increase of GDP further deepens the divided labor of deposit savings and investment. Obviously, economy and finance interact each other in virtuous cycle. As a result, we understand financial development as the process of institutional transformation ofvarious financial organisms. It can be directly described as the change of scale and structure of financial instrument, the change of price mechanisms of financial instrument, as well as the change of scale and structure of financial organism. Rural financial development is similar to it.In part two, we introduce the second-generation financial development, which includes how economic growth affects financial development and how financial development affects economic growth in turn. Respectively, we call the former as the development mechanisms of financial intermediaries and financial markets and the latter as the function mechanisms of financial intermediaries and financial markets. Those theories will be used to explain the relationship of interaction between rural informal financial department and rural economic traditional development. What's more, we abstract from North's institutional transformation theory property rights theory, neoclassic country theory, and the function of ideology, as well as path dependence theory, etc. Those theories will be used to illustrate the transformation logic of rural finance, as well as the institutional transformation of Rural Credit Cooperatives (Rccs) and informal financial organism.In part three, we explain the function mechanisms of rural financial development, which is referred to as the rural formal and informal financial support of economic duality. For the function mechanisms of formal financial organism can be simply explained as the common role of country preference and its own target for profit, we just focus on the informal organism's role in economic growth of traditional department, which can be clarified as follows: the development of informal organism deepens the degree of divided labor of deposit savings and investment of peasant household, and then speeds up economy. Empirical study proves the degree is significantly and positively associated with economic growth speedtwo years later.In part four, we discuss the development mechanisms of rural financial development, namely, the intrinsic logic of formation and transition of formal and informal financial organism. It includes institution choice of the Rccs, the institutional arrangement of informal financi...