Research on Interactive Relationship between Agricultural Insurance and Rural Financial Development in Central and Western Regions

By selecting the panel data from 2001 to 2008 in central and western regions, I adopt the methods of covariance analysis test, Hausman test, panel unit root test and co-integration test to conduct empirical research on the interactive relationship between agricultural insurance and rural financial development in central and western regions. The results show that there is a long-term balanced and interactive causal relationship between agricultural insurance and rural financial development in central and western regions. The agricultural insurance in western regions is the cause or rural financial development, while such relationship in central regions is not tenable. There is an interactive promotion relationship between agricultural insurance and rural financial development efficiency in central regions. While the relationship between agricultural insurance and rural financial development efficiency in western regions is mutually inhibitive, but the rural financial efficiency in western regions promotes the development of agricultural insurance. Then corresponding suggestions are put forward in order to give full play to the role of mutual promotion between agricultural insurance and rural financial development as follows: reinforce the support degree for policy finance in central and western regions; increase the inputs of rural financial institutions in sewing agriculture, countryside and farmers; expand the types and coverage of policy agricultural insurance.