Research On Social Interaction Of The Influence On Farmers' Financial Behavior

Rural finance is a powerful engine to address the weaknesses of China's economic development and maintain the sustainable and sound development of “agriculture,rural areas and farmers”.In order to develop rural finance,China has issued the No.1 central document for many years,addressing the problems of rural financial development from the perspectives of policy supply and financial service provision,but financial restraint still exists.Although great achievements have been made in China's rural financial reform,there are still obvious problems such as Financial restraint.Therefore,some scholars put forward the need to focus research on the subject of financial demand in order to slow down the demand-based financial restraint,so as to improve the degree of supply-demand matching and further improve the inclusiveness of rural finance.Farmers as the demand subject of rural finance demand,their financial behavior can not only reflect the motivation,demand,and application of financial demand side for funds,but also can reflect the current production and living conditions of rural socio-economic development.Therefore,it is of great significance to study the financial behavior of rural residents in order to solve the rural financial restraint in China,make good use of the funds for “agriculture,rural areas and farmers”,and improve the supporting effect of rural finance on poverty alleviation and building a well-off society in an all-round way.Most of existing research on farmers household financial behavior based on the traditional “rational man” hypothesis,and based on the hypothesis of neoclassical economics,Scholars made the “results” agent to conduct “process” of the financial behavior.However,they can neither explain some irrational phenomena in farmers households' financial behaviors nor explain the behaviors themselves.Therefore,this research,based on behavioral economics,studies the financial behavior of farmers from the perspective of social interaction.Under the circumstances of differences in individual abilities and qualities of farmers,from the perspective of social interaction,it can be explained how to stimulate the endogenous motivation of farmers to participate in finance through the interaction between financial behaviors and the positive externality of information.In addition,in the case of relatively low level of education and knowledge in rural areas,we can also make use of the social multiplier effect brought by social interaction to expand rural domestic demand,promote the utilization rate of rural funds,and further boost the sustainable and healthy development of rural finance.For concrete to explore social interaction effects on farmers household financial behavior,this study build a "pre loan-post loan" framework,divides farmers' financial behavior into preloan credit behavior and post-loan consumption selection behavior,while using CHFS2015 & CHFS2017 data,the THM,grouping regression model and the PSM,this paper makes an empirical analysis on the financial behavior of farmers through social interaction from the perspectives of three stages of credit behavior,income heterogeneity,consumption tendency,etc.In terms of credit behavior,social interaction mainly influences farmers' credit behavior in three stages through endogenous effect and exogenous effect,and endogenous effect plays a leading role.What's more,their coefficient indicates the existence of social multiplier effect,which can effectively promote the participation and development of credit.In addition,there is heterogeneity in credit behavior among farmers with different income levels.In the aspect of consumption choice behavior,although credit can promote the increase of investment consumption and conspicuous consumption,the increase rate of investment consumption is much higher than that of conspicuous consumption.At the same time,the test results show that the "Tunnel effect" is significant,while "Keep up with the Jones effect" is not,indicating that after the introduction of social interaction,farmers are more likely to invest in production to enhance their economic and living status,rather than blindly increasing conspicuous consumption and indulging in comparison.Therefore,the correct application of social interaction can play a positive role in the "Tunnel effect",which is conducive to the role of rural finance in supporting rural revitalization.Based on the research conclusion,this paper puts forward that the direction of policy making should be inclined to the actual demand of farmers,make full use of social learning,knowledge spillover,model demonstration and relationship restriction in social interaction,improve the ecological environment of rural finance,innovate financial products and process,and promote resources allocation,further promote supply and demand matching.