A Study On The Impact Of Social Network On Rural Mutual Fund Organizations' Performance

As a cooperative organization based on rural communities,rural mutual fund organizations have played an active role in regulating the shortage of farmers' funds and alleviating the difficulties of rural loans in the course of more than 10 years of development.In recent years,some rural mutual fund organizations have caused incidents such as "illegal fund raising,bank run" and other issues affecting regional financial stability and security.The local government's attitude toward this kind of organization has also changed from being strongly supported to allowing it to fend for itself,and the development of some rural mutual fund organizations has stagnated and the operation is difficult to maintain.However,under the adverse circumstances of the external environment,there are still many farmer's cooperative finance organizations that can achieve efficient operations and have achieved good governance results.The existing literature focuses on the influence of member heterogeneity,governance mechanisms,and property rights structure on the performance of rural mutual fund organizations.However,we must note that compared with other financial institutions or enterprise organizations,rural mutual fund organizations have two prominent features:mutual assistance and community.Based on the natural blood,occupation,and geographical relationships of rural communities,the use of social mechanisms for acquaintances is an advantage for rural mutual fund organizations in system design and operation management.The analysis and optimization of the governance mechanism and governance structure cannot completely solve the governance problems of rural mutual fund organizations,and they cannot reflect the characteristics and advantages of such organizations.Based on this,this paper attempts to cut in from the perspective of relationship contract,and analyzes the mechanism and effect of social network on the impact of rural mutual fund organizations.After carrying out the above analysis,the paper proposes a series of policy recommendations on the supervision of rural mutual fund organizations to help these organizations to reduce costs,control risks,and achieve efficient operation and sustainable management.The research content of this paper mainly includes six parts.In the first part,on the basis of introducing the research background and the significance of the research,this paper introduces the research objectives,significance and methods of this article,and presents the framework of the full text through the technology roadmap.It also introduces the possible innovations and deficiencies in this paper.In the second part,the existing research results are summarized and combed from several aspects such as rural mutual fund organizations,organizational performance,social networks,and governance of relationship contracts,which lays the foundation for further analysis in the following sections.The third part proposes the analysis framework of this article based on contract theory and social network theory.The particularity of farmers' mutual aid organizations determines that relational contract governance is the key to organizational governance.When relational contracts are embedded in social networks,information symmetry and reputation mechanisms in social networks play a role,prompting and guaranteeing the low cost and low risk of relation and fulfillment of contracts.Therefore,this paper proposes a research hypothesis that social network influences organizational performance from the three dimensions of network node activity,network connection strength,and network size.In the fourth part,after introducing the sample of the study,we construct the performance evaluation system for rural mutual fund organizations from two aspects of financial performance and non-financial performance,and select six indicators to measure the social network of rural mutual fund organizations from three dimensions.This article then descriptive statistical analysis of the above indicators.In the fifth part,using the principal component analysis method to calculate the comprehensive evaluation value of the sample rural mutual fund organizations performance,the multivariate regression model was used to empirically test the impact of social network node activity,connection strength and network size on rural mutual fund organizations performance.This verifies the three hypotheses proposed above.The sixth part summarizes the research results of the full text and proposes a series of policy recommendations to help rural mutual fund organizations to improve their performance and achieve sustainable development.Through the above analysis and research,this paper draws the following conclusions:(1)rural mutual fund organizations have different performances and relatively weak financial performance,but generally have better social performance.(2)Social networks have a significant impact on the performance of rural mutual fund organizations.High network node activity and network connection strength are conducive to the improvement of the performance of rural mutual fund organizations;however,the larger the size of the rural mutual fund organizations network,the worse the performance of the organization.Based on the conclusion of this study,this article proposes four policy recommendations:(1)Classified management of rural mutual fund organizations,continuous supervision and gradual retreat in parallel.(2)Let the social network play its role to increase the participation of ordinary members.(3)Controlling the scope of operating activities.(4)Strengthen the training and supervision of the management of rural mutual fund organizations.