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Relationship between Rural Financial Development and Farmer’s Income Growth


  • Li, Jing-jing
  • Qi, Yan-bin


According to the research on the relationship between rural finance and farmers’ income growth by domestic scholars, there are certain disadvantages in the stationary test, model design, data collection of time series data. According to the data from 1992 to 2005, per capita net income of farmers (y), rural credit investment (i), structure of rural employees (S) and price index of agricultural products (P) are selected as four indices. Eviews 5.0 software is used to analyze the relationship between rural financial development and income growth. OLS regression mode is established by Granger causality test, ADF test and co-integration relation test. Result shows that test statistic value is -2.8718, which is smaller than the -1.9710 critical value at 5% significant level. Thus, the residual sequence is a stationary sequence, indicating that there is co-integration relationship among per capita net income of farmers, rural credit investment, structure of rural employees and price index of agricultural products. It is put forward that we should accelerate the development of rural finance and reinforce the support for rural credit in order to improve farmers’ income.

Suggested Citation

  • Li, Jing-jing & Qi, Yan-bin, 2009. "Relationship between Rural Financial Development and Farmer’s Income Growth," Asian Agricultural Research, USA-China Science and Culture Media Corporation, vol. 1(11-12).
  • Handle: RePEc:ags:asagre:93406

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