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Financing green agriculture: The role of rural financial services in enhancing eco-efficiency

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  • Zhou, Xiaoxu
  • Zhang, Runqing

Abstract

Using panel data from Chinese prefectures between 2010 and 2022, this study investigates the effect of rural financial services on agricultural eco-efficiency. Eco-efficiency is measured through a non-radial slack-based measure model, incorporating desirable outputs and environmentally undesirable by-products. Results from fixed-effects and instrumental variable regressions suggest that increased rural finance availability significantly improves eco-efficiency. Mechanism tests indicate that this effect operates primarily through improved access to green production technology and more effective input allocation. Moreover, the relation is stronger in regions with higher financial inclusion and better credit structure.

Suggested Citation

  • Zhou, Xiaoxu & Zhang, Runqing, 2026. "Financing green agriculture: The role of rural financial services in enhancing eco-efficiency," Finance Research Letters, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:finlet:v:91:y:2026:i:c:s1544612325018999
    DOI: 10.1016/j.frl.2025.108645
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    References listed on IDEAS

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