An Empirical Study Of The Efficiency Of Rural Credit In Jilin Province

Agriculture is the cornerstone of the national economy, so the development of rural economy is of great significance to China's economic development. Rural development is closely linked with the financial support. Since the reform and opening up, our government has focused attention on the rural economic system reform, particularly in recent years increasing investment on financial resources in rural areas. It is worth while researching if these inputs really promote the development of the rural economy effectively.Jilin, a major agricultural province, is also an important grain production base in China. In recent years Jilin Province has not only increased investment in rural credit but also accelerated the pace of rural financial reform. Therefore, the research of the rural credit efficiency in Jilin Province is directive significance.The paper adopts two different methods to respectively make an empirical study into the efficiency of rural credit in Jilin. Due to the measurement and calculation of the dynamic changes of the rural credit efficiency, first the classical model of economic growth needs improvement, and it will be transformed into state-space model, and then take Kalman filtering method to estimate the state space model, and depicts the changes of means of rural credit efficiency in Jilin Province. Then this paper adopts the DEA model of non-parametric estimation to make the empirical analysis for the rural credit efficiency in Jilin Province and compares the results with the state space model conclusions. The result is that the conclusion of Malmquist-DEA model and the state space model is roughly same. In addition, the paper also adopts static state BCC model to comparatively analyze efficiency of rural credit both in Jilin Province and in National nine regions in order to better understand the situation of the efficiency of rural credit in Jilin Province in the whole country.By using two different methods to make an empirical study into rural credit efficiency in Jilin Province, this paper can draw the following conclusions: 1. After controlling the state space model of Investment in rural areas of Jilin province on the effect of the agricultural GDP, rural credit and agricultural GDP has a positive long-term relationship between each other, but the coefficient of this relationship is a little smaller, indicating that although the loans are efficient in rural areas of Jilin Province, the efficiency is not high.2. Making static analysis of the efficiency of rural loans in Jilin Province by BCC model, technical efficiency, pure technical efficiency and scale efficiency is not so high and they are ranking after middle partial in the selected 9 areas, indicating that although the quantity of loans is on the rise investment in Jilin province, scale revenue is decreasing. This means that effect of rural loans on rural economic development is weak, that is similar with conclusions of state space model.3. Using the state space model and Malmquist-DEA model to analyze dynamic changes, it turns out that they are the same conclusion. From 1990 the efficiency of rural credit in Jilin Province can be roughly divided into three stages. The first stage is from 1990 to 1997, which is growing period. The second stage is from 1998 to 2003, which is wandering and falling period. The third stage is from 2004 to 2009, which is at the period of recovery. After analysis, we can find that changes of rural credit efficiency in Jilin Province are closely related to external shocks (such as the Asian financial crisis), the national and regional policies for rural finance. When these external factors are conducive to the development of the rural economy, the efficiency of rural credit will increase. If these external factors hinder the development of the rural economy, the efficiency of rural credit will decline.The inadequacy of the article is that the measurement equation is simple and lack of consideration about other factors of economic growth in rural areas when the analysis of the state space model. Besides, when using DEA model, the selected sample size and input-output variables in areas is not enough, so the results easily lead to errors and thus not more accurately reflecting situation of rural credit efficiency in Jilin Province.