Download The Positive Analysis of Heilongjiang Province Rural Finance

The Positive Analysis of Heilongjiang Province Rural Finance
Development and the Farmers' Income Growth
MA Jun1, ZHONG Shen2
1 School of Finance, Harbin University of Commerce, P.R.China, 150028
2 School of Finance and Public Administration, Harbin University of Commerce, P.R.China, 150028
[email protected]
Abstract: The financial development plays a great promoting action to a country’s economy, especially
to the farmers' income. This article from the intermediate perspective stratification taking Heilongjiang
Province as the object of study, through establishing the econometric model analyzes the relations of
our country regional finance development with the farmers' income, putting forward some brief policies
suggestions to the Heilongjiang Province finance development in promoting the farmers' income growth,
there is also certain guiding sense to our country region finance and rural reconstruction coordinated
development.
Key words: Heilongjiang Province, financial development, farmers' income
1 Introduction
Since the reforming and opening of China, our country national economy has made a huge progress,
in recent years which has become an important propelling force to the global economic development.
But our country rural economy in entire national economy proportion is actually dropping. The income
differential between city and countryside resident is enlarging; the farmers' income even presented the
absolute value drop in the late 90s. The “three agriculture” question has become a significant difficult
problem which puzzled our country economic development. The people had generally realized the
importance of the rural finance development to the rural economy growth as well as the farmers' income.
From the 1970s, Goldsmith, Mackinnon and Shaws established the financial development theory, they
quite consistent viewpoint was that the financial development both has the influence to the economic
growth and receives the economic growth influence, after that some scholars on the foundation of
accumulating the massive positive studies literature to obtain the financial development and the
economic development promote mutually[1][2][3].
Profits from the overseas research results, some domestic scholars also have conducted the research
to the relations of our country finance development and the economic growth, such as Zhang Bing (2003)
has made detailed explanation in positive analysis article about the relations of our country finance
development with the economic growth[4]. However, seen from the comprehensive survey concerned
farmers' income growth research ,it is not difficult to discover that the financial development with the
farmers' income growth relations' research has been concealed in the research of financial development
and the economic growth, less literature is direct confirmation about the relations of finance
development with the farmers' income growth. The relations of financial development with the farmers'
income are naturally substitutes by the relations of financial development with the economic positive
growth. In the existence theory literature, many scholars have proposed that through the financial
development or the rural finance development to promote the rural economic development, thus
realizing the farmers' income growth. However, most of these researches belong to the theory and the
policy analysis, lack of effective positive support. The explanation about the relations of finance
development with the farmers' income growth can only be indirectly obtained from the related financial
development and the income differential research. Wen Tao, Ran Guang he, Xiong Deping (2005)
carried on the positive analysis about the relations of finance development with the farmers' income
growth in our country, the analysis had demonstrated that the Chinese finance development had the
remarkable negative effect to the farmers' income growth, directly replaced the relations of finance
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development with the farmers' income growth by the positive function relation of financial development
with the economic growth is not in accord with the fact of our country economic development [5]. The
northeast three provinces as the country “granary”, the farmers' income growth then becomes the
important symbol of the entire local economy and the social development. This article on the foundation
of the previous scholars studies on this question, attempts to make positive analysis on the slow growth
of farmer income from the Three Northeastern Provinces area rural finance development angle ,based on
the data attainable, this article mainly carries on the proof from Heilongjiang Province's situation[6][7].
2 The Empirical Analysis
2.1 Target designs
In order to prove the Heilongjiang Province rural finance development relations with the farmers'
income, this article will use two groups of targets: one group is used to reflect the Heilongjiang Province
farmers' income growth condition, the other group reflects the Heilongjiang Province rural finance
development condition. Selecting the farmer year average per person net income to weigh the
Heilongjiang Province farmers' income growth condition; the target reflecting the Heilongjiang Province
rural finance development condition includes: The financial development scale merit, considered the
under developed local credit's function, designed the good reflection rural finance development scale
target, RL/RGDP. And RL expressed the countryside loan remaining sum, RGDP expresses countryside
GDP, because there is no the countryside GDP data at present, here uses the primary industry GDP as
countryside GDP. This target writes as RLG. The financial development structure indicator, considered
the Rural enterprise in rural economy's key position, selects reflected the countryside loan structure
target as the financial development structure indicator, namely RLT/RL, RLT is the Rural enterprise loan
remaining sum, this target writes as RLTL. The financial development efficiency target, the financial
development efficiency in this paper refers to the rural finance intermediary to transform the countryside
deposit for the countryside loan which supports the rural economy grows efficiency, indicated with the
ratio of countryside outstanding of deposits and the countryside loan remaining sum, namely RA/RL,
writes as RDL.
①
②
③
2.2 Data origination and explanation
In this paper the variable and the data information mainly include the farmers' income and the rural
development of finance. For more meaningful to the current economy, this article chose Heilongjiang
Province 1985-2005 year data to conduct the analytical study. Countryside loan remaining sum is rural
enterprise loan remaining sum and the agriculture loan remaining sum. Rural enterprise loan remaining
sum is Rural credit cooperative villages and towns business (matter) industry sum. Countryside
outstanding of deposits is peasant household savings deposit remaining sum and the sum of agriculture
outstanding of deposits. The data come from "the Heilongjiang Province Statistical annual
(1986~2006)" the directly uses below is obtained by the data compilation. All empirical analysis of this
article draws support in EVIEWS3.1 completes [8].
2.3 Variable's unit roots examine
This article first carried on the unit root examination to various variables (the ADF examination),
to fixed variates stability. First takes the logarithm to the farmer average per person net income,
indicated with FR. Through the EVIEWS examination discovered that FR, RLG, RDL and RLTL are the
non-steady variables. Uses the method of difference in this regarding non-steady variable's processing,
finally see Table 1.
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Variable
FR
lnFR
RLG
RLG
RDL
RDL
RLTL
RLTL
△
△
△
△
Examination form
(C, T, L)
(C,0,0)
(C,T,0)
(C,0,0)
(C,0,0)
(C,0,0)
(C,0,0)
(C,0,0)
(C,0,0)
Table 1 ADF check result
Examination
Marginal value (5%
value
remarkable levels)
5.9825
-3.6591
-0.7487
0.3659
0.4153
-1.9592
-4.86
-1.9602
-1.2462
-1.9592
-13.0208
-1.9602
-1.4996
-1.9592
-4.4432
-1.9602
Whether steady variable
NO
YES
NO
YES
NO
YES
NO
YES
Note: 1. RLG expressed the RLG first order difference, other are similar; 2. (C, T, L) expressed the
examination model including the intercept item, the tendency item and lag exponent number position L.
2.4 Cooperated examine
In front , already known that the Heilongjiang Province rural finance development with the farmers'
income are the non-steady first-order list entire sequence, but these targets possibly had some kind of
steady linear relationship, it has reflected the variable long-term stability relations, namely cooperated
relations. Therefore this article uses Johansen Cointegration inspection method to carry on cooperated
examination. But cooperates examination is one kind inspection procedure based on the VAR model,
therefore before carrying on cooperates examination must determine the VAR model the structure.
Based on various data production process characteristic, I will choose the intercept item, but does
not bring the tendency item of VAR model. In order to maintain the reasonable degree-of-freedom at the
same time must eliminate the error term the autocorrelation, first chooses the VAR model the biggest lag
exponent number is 4, from fourth-order drops to first-order in turn chooses its most superior lag
exponent number. The use criterion, simultaneously used statistics examination residual sequence
whether there is autocorrelation, finally discover that FR and RLG, RDL, RLTL do not exist cooperate
relations.
2.5 Grainger causal relation analyzed
After confirming that FR and RLG, RDL, RLTL these three variables had the long-term relations,
further using the Grainger causes and effects to examine the variable relations analyzes. What Table 2
examinations is the farmers' income growth and the rural finance development Grainger causal relation.
May see from the table, at the most superior lag phase, regardless of being the rural finance
development scale merit, the rural finance development structure indicator, the rural finance
development efficiency target, there is no Grainger reason becoming the farmers' income growth under
10% confidence. Similarly, the farmers' income growth with these three target relations is also denied.
With cooperates examinations check result maintains consistent. Greenwood and Jovanovic promulgate
the income level enhancement impetus finance organization and the financial transaction development
viewpoint, not obtained the confirmation in the Heilongjiang Province countryside credit.
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Table 2 Countryside residents receive growth and the rural finance development’s Granger causes
and effects examination (sample sector 1985~2005)
Most superior
Sample
F statistical
Probabili
variables
Zero supposition
lag phase
number
value
ty
△RLG
△RDL
△RLTL
△RLG not LNFR’s Granger cause
LNFR not△RLG’s Granger cause
△RDL not LNFR’s Granger cause
LNFR not△RDL’s Granger cause
△RLTL not LNFR’s Granger cause
LNFR not△RLTL’s Granger cause
1
18
0.50246
0.61632
1
18
2.54298
0.11693
1
18
0.63199
0.5471
1
18
2.35533
0.134
1
18
3.0591
0.08151
1
18
2.03955
0.16967
3 Conclusion
This article's real diagnosis result showed: In 1985 - 2005 Heilongjiang Province rural finance
development has not become the important attribute of the farmers' income grows. Instead it has created
the countryside fund massive shifts and the outflow, grew the inhibitory action to the farmers' income. It
is not supported that the present rural finance development with the farmer’s income growth relation
supposition but it is simultaneously not denied positive relations between the finance development and
the economic growth regarding the farmers' income growth theory compatibility. What this empirical
analysis result promulgates is the fact of present economic development strategy and the financial
system causing the Heilongjiang Province finance development in the structure and the function, this
province rural economic development and the farmers' income are uncoordinated.
Heilongjiang Province as the model Northeast old Industrial base, the farmers' income growth as the
Heilongjiang Province economic development and the financial development profitable target is
unshakeable. The financial development and the farmers' income growth positive function relations exist
not only in the theory but the logic, moreover to the Chinese economic development is also essential.
But this goal’s realization, only by reversing the structure and the function unbalanced condition as soon
as possible our country in the finance developing process exists now. Through optimizing the rural
finance institutional arrangements, promoting the countryside regular finance compatible reform,
guiding the countryside folk finance standard growth, perfecting rural finance organization system,
refocusing the rural finance market main body, promoting the rural finance market healthy growth, thus
preventing the rural finance outflow, perfecting rural finance serves to the rural economy function,
realizing the rural finance and rural economy coordinated development, enhancing the rural finance
contribution only by so, the Heilongjiang Province finance development only then truly becomes the
premise and the condition of this province rural economy and the farmers' income growth.
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