A Study Of The Affection On Financial Development To Level Of Urban-rural Economic Integration In Hunan Province

As an agricultural province, Hunan Province has go through the “reform andopening up” for more than30years. Although the level of financial development andthe level of urban-rural economic development in Hunan province have been rapidlyincreased, the urban-rural economic development is still obviously unbalanced.Although the traditional theory of financial development between financialdevelopment and economic growth are more in-depth and thorough research, but theeconomic integration in urban-rural areas is not simply the economic growth, it besideurban-rural incomes increase, urban-rural industrial structure adjustment and the raiseof the urbanization level across the board.Firstly, this study raises a foothold on the basis of the theoretical basis and theprevious existing literature. Then the financial development of Hunan Province on therole of the level of economic integration in urban-rural areas are discussed, on the onehand, summarized the theoretical basis how financial development affects the level ofintegration of urban-rural economy, on the other hand proposed mechanism path howfinancial development affects the level of integration in urban-rural areas. Based onthe data of financial development and the urban-rural economic integrationdevelopment in Hunan province, use the quantitative analysis methods to conduct anempirical analysis of the relationship between the financial development andurban-rural economic integration. Finally, based on the theoretical and empiricalanalysis results, raise policy and recommendations of upgrading the level ofurban-rural economic integration from the perspective of financial development.After the theoretical and empirical analysis, the study holds the idea thatfinancial development affecting the level of urban-rural economic integration byimpacting the urban-rural industrial structure, the urban-rural economic growth, theurban-rural incomes and urbanization level. The efficiency of financial developmentand the scale of financial development produced a positive effect on the level ofurban-rural economic integration, the former two promoted one-way Grangercausality on the latter one, the variance decomposition results also show that theefficiency of financial development impacts the level of urban-rural economicintegration on a maximum level.