An Empirical Study On Relationship Between Financial Development And Economic Growth In Rural Based On Jingzhou County’s Data

Over the years, the theory of financial development and economic growth has been the research focus of Western academia. Combined with the experience of the world’s economic growth and development, scholars study shows that exists a certain degree of correlation between financial development and economic growth, and the financial system on economic growth has a crucial role. So in many countries, governments and economists have attached great importance to the role of financial development in economic growth. But in today’s rural China, financial repression phenomenon prevalently, and rural financial services is difficult to meet the requirements of the "agriculture, countryside and farmers" development, which affect China’s economic development and social stability. At the same time, China’s vast territory, around the range of economic development vary widely, so we must be combined with the differences of the regional rural financial development to study the rural financial deepening, and make the rural financial development policies consistent with local conditions for different regions.Jingzhou City, located in south-central Hubei Province, is cotton and edible oil production bases and freshwater fisheries base, known as the land of ish and rice. Since the reform and opening up, Jingzhou City’s national economy achieved greater development. However, while there is also rural economic slowdown, especially after the1990s, the farmers’income growth show large fluctuations, farmers’ ncome even show negative growth in a particular year. The income gap became widening between urban residents and rural residents, farmers’ per capita net income of5464Yuan in2009, equivalent to only40.09percent of urban residents per capita disposable income. The trouble of the "agriculture, countryside and farmers" issue is a major challenge to of Jingzhou economic development. There are many reasons of rural economic growth slowdown, one of the most important reason is the issue of rural financial supply, which is a bottleneck in the development. From the current situation, the development of rural finance is not sufficient to meet the needs of the of Jingzhou rural economic development. On the one hand, the outflow of equity capital in rural areas. Existing rural formal financial institutions absorbs the limited deposits from rural to deposit to the central bank, and then flows to the developed urban areas to bring them into their own rural funds cannot flow back, resulting in a shortage of funds. On the other hand, the insufficient supply of rural financial institutions. Since the mid-1990s, commercial financial institutions in rural areas reduce and the vague position of the rural credit cooperatives function, so the supply of rural financial institutions reduce and this situation cannot meet the financing needs of the rural economy, which is the Jingzhou’s main reason for rural financial development difficulties. Rural serious shortage of funds caused by inadequate investment in agricultural production, and lagging agricultural infrastructure has been seriously hampered the development of rural economy. In recent years, a series of reforms in rural finance temporary relief from the pressure of demand in rural funds, but in the long run is still difficult to meet the development needs of the Jingzhou rural economy. Therefore, the Jingzhou county rural financial development and rural economic growth is the object of study.The article first reviews the research on financial development and economic growth at home and abroad, a more detailed review of the development of weight since the mercantilist theory of financial development and economic growth, and gives a summary of different theories. And Review and Prospect the deficiencies in this study at home and abroad, pointing out that the relationship of transition economies, financial development and economic growth and of insufficient, there are still further study.Then briefly reviewed rural financial reform and development of the course since the founding of China, and summarizes the Jingzhou financial system as a microcosm of China’s rural financial system, especially since the development of rural financial reform after1998. Jingzhou so far has been the formation of the rural financial system, including commercial, policy, cooperative financial institutions, led to formal financial institutions, rural credit cooperatives for the core.In accordance with the relatively complete set of index system in terms of the relative size of the financial instruments, financial institutions, status, rural financial market structure and financial intermediation functions, the Jingzhou rural financial development measured. Pointed out the the Jingzhou rural financial development the existing problems are three:First, financial institutions not subject to the management of local government, which affected the efficiency of agricultural loans; Second, the high operating costs, less productivity gains and operational risks in agriculture the basic characteristics of the loans; the quality of rural financial institutions is generally low.On the basis of theoretical analysis, this paper empirical analysis Jingzhou rural financial development and economic growth, which is also the focus of the article. In this section, the data collected in accordance with the "Statistical Yearbook of Jingzhou", the paper selected Jingzhou rural financial and economic aspects of data and finance-related rate and degree of financial support for agriculture and other related indicators from1998to2009, and use units root test, cointegration test and Granger causality test to make an empirical test on the Jingzhou rural an empirical test. The test results show that in the past ten years, although the Jingzhou rural financial support for agriculture degree of the level of economic growth in rural areas do not have any impact, even in the long run there will be some inhibition, the Jingzhou rural financial rural role in promoting economic growth is very clear, played a role of "supply-led",Finally, the paper gives a reasonable proposals for the Jingzhou rural specific circumstances. Mainly includes three aspects, deepen the reform of rural financial institutions; Second, improve the rural financial markets; third, improve the financial environment in rural areas.