A Study On The Regional Heterogeneity Of The Impact Of Inclusive Financial Development On The Income Gap Between Urban And Rural Residents In Yunnan Province

The state council pointed out in 2016 that vigorously developing inclusive finance is an inevitable requirement for China to complete the building of a moderately prosperous society in all respects.The government of Yunnan province has made remarkable achievements in poverty alleviation by strictly implementing the state council's deployment and stepping up efforts to develop inclusive finance.However,the income gap between urban and rural residents in Yunnan province is still too large.For such a frontier province with a majority of agricultural population,the long-term existence of large income gap between urban and rural residents is bound to have a negative impact on its economic development and social stability.Therefore,it is particularly important to study the influence of the development of inclusive finance on the income gap between urban and rural residents in Yunnan province.At present,both the level of inclusive finance development and the rural residents' dependence on inclusive finance are different in Yunnan's various regions.What's more,there exists the heterogeneity in the effectiveness of developing inclusive finance to narrow the gap between urban and rural residents income,but the heterogeneity in the Yunnan's county areas was never studied before.When formulating inclusive finance policies,relevant departments in Yunnan province could not learn something about the regional heterogeneity of the impact of county inclusivefinance development on the income gap between urban and rural residents from others,which made relevant departments to adopt undifferentiated inclusive finance policies.Then it appears particularly important to study the regional heterogeneity of the impact of the development of the county inclusive finance in Yunnan on the income gap between urban and rural residents.First,this thesis uses the "inverted U" curve between financial development and income distribution put forward by Greeenwood and Jovanovic(1998)and a negative linear relationship between financial development and income distribution found by Galor and Zeria(1993)and finds that when the development of the county inclusive finance is in the low level,the development of inclusive finance in Yunnan is to curb the narrowing of the income gap between urban and rural residents.While when the developing level passes a critical point,it is advantageous to the narrowing.Then,this thesis introduces the measure methods of the county inclusive financial index in Yunnan,builds measurement system of the county inclusive financial index in Yunnan,and measures the financial index of 120 counties in Yunnan province.According to the division of The Urban System Planning in Yunnan(2011-2030)announced by provincial government,the 120 counties of Yunnan province is divided into central Yunnan,western Yunnan and southeastern Yunnan,northeastern Yunnan,southwestern Yunnan and northwestern Yunnan,and then get the average of the county inclusive financial index in these six region.On this basis,the present situation of the county inclusive finance in these six regions of Yunnan province is systematically analyzed.Finally,the empirical analysis of the impact of the development of inclusive finance in Yunnan province on the income gap between urban and rural residents is made.Based on the panel data of Yunnan province with the multivariate analysis method,this thesis systematically presents the regional heterogeneity of the impact of inclusive finance development on the income gap between urban and rural residents in the six counties of Yunnan province,and puts forward corresponding suggestions in policy making.The research shows that: 1.The development level of county inclusive finance in central Yunnan is the highest among the six regions,and the financial infrastructure ismore perfect than that in other five regions.2.The impact of the development of county inclusive finance in Yunnan province on the income gap between urban and rural residents has obvious regional heterogeneity.At present,the development of the county inclusive finance has promoted the narrowing of the income gap between urban and rural residents in central Yunnan,where the development level of inclusive finance is relatively high,but widened the income gap between urban and rural residents in other five regions with low development level of inclusive finance.3.There exists a marginal diminishing effect on the widening of the income gap between urban and rural residents with the development of the county inclusive finance in Yunnan province.The impact of the development of county inclusive finance in Yunnan province on the narrowing of the income gap between urban and rural residents has a critical point.When the development level of inclusive finance reaches a certain critical point,the impact of the development of inclusive finance in county areas on the income gap between urban and rural residents shifts from widening to narrowing the income gap between urban and rural residents.Based on the above conclusion and the background of energetically developing county inclusive finance in Yunnan,this thesis puts forward the following suggestions:(1)since the development level of the county inclusive finance in Yunnan is relatively low at present,the development of the county inclusive finance in Yunnan will widen the income gap between urban and rural residents.Therefore,this thesis suggests that the government of Yunnan province should take an inclusive attitude to the current inclusive financial development.(2)According to the different development levels of inclusive finance in six regions of Yunnan province,this thesis puts forward differentiated financial inclusion policy suggestions.For the central Yunnan,with the highest development level of inclusive finance,the government should encourage financial institutions in this area to innovate and vigorously develop its consumption credit business.While for the other five regions with low development level of inclusive finance,such as west Yunnan,the government should encourage them to strengthen financial infrastructure,improve network coverage and increase the number of bankers.(3)Formulating differential strategies to narrow the income gapbetween urban and rural residents.Because the development of inclusive finance in central Yunnan can effectively reduce the income gap between urban and rural residents,we should vigorously develop its inclusive finance to narrow the income gap between urban and rural residents.For other regions except central Yunnan,the development of inclusive finance has played a role in widening the income gap between urban and rural residents,and more fiscal investment should be made in rural areas of these regions to improve infrastructure construction and improve the rural investment environment,thus curbing the further widening of the income gap between urban and rural residents in these regions.