Research On The Influence Of Agricultural Subsidies On Rural Families' Entrepreneurship

Agriculture is the foundation of economic development,and the idea of agriculture is deeply rooted in China.The agricultural subsidy policy is the government's transfer payments acting as an important means of incentive to motivate farmers to produce.What is the effect of agricultural subsidy policy? What effect does it has on farmers' production behaviors? As a kind of non-agricultural production,entrepreneurship plays an increasingly important role in rural economic development.The government supports and encourages rural entrepreneurship in both policy and financial aspects.Since the state attaches great importance to agricultural development and entrepreneurial activity,if farmers are engaged in agricultural production and they also undertake entrepreneurial activities,namely,"concurrently engaged" behavior.So are rural families with agricultural subsidies more willing to start businesses? If there is a relationship,what is the mechanism? This article tries to answer these questions.This paper uses the nationwide representative data—Chinese family financial investigation data in 2011,using Stata software and Probit model to investigate the agricultural subsidies on non-agricultural production behaviors: Entrepreneurial behavior of rural families.Research shows that agricultural subsidies significantly reduce the probability of starting a business in rural families.Specifically,agricultural subsidies increased by 1 per cent and rural families entrepreneurship decreased by 15.6 percentage points.And the effect of agricultural subsidies for rural households' entrepreneurship probability shows heterogeneity in different sub samples: agricultural subsidies significantly reduced probability of rural family entrepreneurship in low social network group and no-major grain producing areas group,but did not significantly reduce the probability of rural families' entrepreneurship in high social network group and major grain producing areas group.Moreover,it further proves the internal mechanism that agricultural subsidy affects rural families' entrepreneurship: agricultural subsidy-raising agricultural income-reduces the probability of rural families' entrepreneurship.Finally,the paper puts forward corresponding policy Suggestions according to the research conclusions.