A Study Of The Relationship Between The Financial Development And Urban-Rural Income Disparity In Guangdong

This work conducts a study of the relationship between financial development and urban-rural income disparity in Guangdong province.It first reviews the development of the theoretical researches in this area, then describes and performs a statistical study of the financial development and urban-rural income disparity in Guangdong province. In general, the urban-rural income ratio in Guangdong has been increasing in the past, which was consistent with the trend in nationwide. Recently, it appears to be stationary and lower than the nationwide result. By studying the financial development, it is found that the financial interrelations ratio of Guangdong behaves more fluctuant compared to the nationwide result. In other words, the nationwide financial interrelations ratio has been monotonically increasing in the past 30 years. However, the financial interrelations in Guangdong had more fluctuations during the same time.After having discussed the ways that financial development influences the urban-rural income disparity, this work adopts cointegration method to study the quantitative relationship between financial development and urban-rural income disparity. Empirical evidence shows that the urban-rural income disparity has a long-term cointegration connection to financial development. For example, the urban-rural income disparity has a positive correlation to the scale and efficiency of the financial development and the financial product. On the contrary, it has a negative correlation to the scale of agricultural loan. Given current circumstances, the financial development in Guangdong actually intensifies the urban-rural income disparity.