Informal Finance,Family Entrepreneurship And Resident Income

Entrepreneurship is the driving force for economic growth.In the practice of China's economic development,since the economic reform,China's transition from a highly centralized planned economy to a socialist market economy has been growing rapidly.The entrepreneurial activities of the family have grown rapidly.China's rapid economic development has also significantly increased the income of urban and rural residents.In the vast rural areas,farmers' entrepreneurial activities play an important role in increasing employment opportunities,raising the income level of farmers and narrowing the urban-rural income gap.With China's economic development shifting into the new normal,the economy is facing downward pressure,China's economic growth is to shift from the original capital-driven,factor-driven to innovation-driven.In the new period,it is of great practical significance to study the ways in which the entrepreneurial spirit of our people should be stimulated and family entrepreneurship should be promoted,thus increase the income of the residents.Financial development can promote the growth of residents' income,and summarize the research channels of the impact of financial development on the income of the residents,including the way of economic growth,the way to upgrade industrial structure,the way of career choice,the way of financial service and the way of human capital investment.The latest development of financial development theory"financial development and entrepreneurial spirit" theory pointed out that the allocation of financial resources will affect the residents through the entrepreneurial activities and then affect the income.According to this theory,the logical relationship between "financial development-family entrepreneurship-income growth.is established,which provides a new perspective for the study of the impact of financial development on residents' income.But the relevant research at home and abroad only focus on formal financial development and neglect the role of private finance.China has urban and rural dual financial structure,the formal financial development in rural areas lagged behind the city,rural family entrepreneurship will face more serious credit constraints.As a supplement to formal finance,private finance is of great significance in alleviating the credit constraints of farmers and supporting rural entrepreneurship.The focus point of this paper is how the relationship between informal finance,family entrepreneurship and income growth is related,and whether the mechanism of informal finance-family business-income is true,whether there are differences between urban and rural areas.This article refers to the practice of the previous literature,use "whether there are private loans" and "private borrowing amount" as a proxy for private finance indicators,use "whether to self-employed business" as a family business agent indicators.The empirical study was conducted using 2013 China Home Financial Survey(CHFS).The study draws the following conclusions:First,the impact of private finance on the income level of rural households has a significant positive effect on the income level of urban households is not significant,there are significant differences between urban and rural areas.Second,the role of informal finance to promote income growth mainly occurs in rural households with middle and upper-income groups,the higher the income level of rural households,the more income from the informal financial.Thirdly,private finance can increase the resident income by increasing the probability of family choice.However,the mechanism of "private finance-family business-household income" exists only in rural areas but doesn't worked in urban areas.Further analysis finds that the reason why the mechanism has urban and rural differences is that the impact of private finance on urban and rural family entrepreneurship is different.The findings of this paper further enrich the existing research results,provide new empirical evidence for the study of the relationship between informal finance,family entrepreneurship and income growth,and provide the decision-making basis for the government to formulate the policy of narrowing the urban-rural income gap and increasing the income of rural home.