Research On The Peer Effects Of Farmers’ Credit Behavior And Influence On Credit Constraint

The traditional research on the credit constraints faced by farmers focuses on the individual characteristics of farmers to explain the factors why farmers face credit constraints,and the peer effects of farmers’ debt behavior provides a new perspective.This paper selects farmers’ data from China Household Finance Survey of Southwest University of Finance and economics in 2015 as the research object to explore the peer effects of farmers’ debt behavior and its impact on credit constraints.Through the empirical analysis,this paper finds that there are the peer effects in farmers’ debt behavior,that is,farmers’ debt behavior will be affected by other farmers in the same area.This paper finds that the peer effects of farmers’ debt behavior will also have an impact on credit constraints.The stronger the peer effects of farmers’ debt behavior in the same area,the lower the credit constraints farmers will be subject to;the weaker the peer effects of farmers’ debt behavior in the same area,the stronger the credit constraints farmers will be subject to.This paper mainly includes the following three aspects:(1)This paper combs the mechanism of the peer effects of farmers’ lending behavior,analyzes the existence of the peer effects of farmers’ debt behavior in theory,and analyzes the possible impact of the peer effects on Farmers’ debt behavior on this basis,and puts forward that farmers’ debt behavior has the peer effects and the peer effects of farmers’ debt behavior can alleviate the credit constraints(2)on the basis of theoretical analysis,based on the survey data of Chinese family finance,this paper controls the characteristics of the villages where farmers live and the personal characteristics of farmers,and empirically analyzes the conglomeration effect of farmers’ debt behavior;(3)This paper empirically tests the influence of conglomeration effect of farmers’ debt behavior on their credit constraints,and analyzes the influence of conglomeration effect of farmers’ debt behavior on credit constraints.The research results show that:(1)The debt behavior of farmers in the same area has the peer effects,that is,the choice of the debt behavior of farmers will be affected by the debt behavior of other farmers in the same area.The empirical results show that the average debt limit of other farmers in the same area will have an impact on individual debt behavior,which shows that the debt behavior of farmers has a significant group effect.(2)An empirical study on the data from the 2015 China Household Finance Survey found that the stronger the peer effects of farmers’ debt behavior,the lower the degree of credit constraints imposed on farmers,that is,the peer effects of farmers’ debt behavior can effectively reduce the farmers Facing credit constraints.(3)The individual characteristics and family endowments of rural households also have an important impact on credit constraints.From the perspective of the individual characteristics of farmers,the worse the health of farmers,the higher the demand for credit funds,and the more vulnerable they are to credit constraints;the lower the education level of farmers,the more serious the credit constraints;the weaker the risk tolerance of farmers,the more vulnerable the farmers are to the credit constraints;from the perspective of the family characteristics of farmers,the higher the income level of farmers,the lower the impact of credit constraints on farmers.Based on the above research,this paper puts forward the following policy suggestions:(1)fully mobilize the vitality of the rural financial market,make full use of the peer effects of farmers’ debt behavior,help farmers understand the credit policy and information,promote the development of rural finance,and lay the foundation for the development of rural economy;(2)improve the education level of farmers,especially strengthen the popularization of 12-year compulsory education system;(3)improve the income level of farmers,improve the availability of credit;(4)improve the rural financial environment,strengthen the construction of rural credit system,reduce the operational risk of financial institutions.