The Positive Analysis Of The Reform Performance Of Rural Cooperatives In Northern Jiangsu

With the confirmation of rural cooperatives' role as "financial enterprises", how to advance business management, shift managing mechanism, strengthen profitability and increase service level have become important issues in the development of rural cooperatives. Since 2000 when Jiangsu Province was set as a pilot region, the rural cooperatives there have carried out active exploration in its property rights system as well as managing mechanism. The central government initiated a new round of reform among rural cooperatives in eight provinces and cities (Jiangsu, Zhejiang, Shandong, Jiangxi, Guizhou, Jilin, Chongqing, Shaanxi) in August of 2003, allowing these cooperatives to choose property rights mode and organizing form by themselves according to local situation and actively construct effective corporate governance frame based on clearly defined property rights in order to improve the internal management and service level of cooperatives. Up to now, the rural cooperatives in Jiangsu Province have generally developed well with gradually improved management level and progressive headway in property rights reform. The regional economic development differs tremendously in Jiangsu Province, which not only has the developed southern region with advanced integration between urban and suburban areas, but also the less developed traditional farming region in the north. So in different parts of Jiangsu Province, the specific objective and conduction mechanism are not the same in the new round rural cooperatives reform. Take northern traditional fanning region as an example, a comprehensive performance assessment of the new round reform will promote rural cooperatives reform further on a national basis and then offer ideas for supporting reforms in rural finance.This dissertation is based on the issue of performance of rural cooperatives reform in northern Jiangsu Province, aiming at answering three questions through research: First, to quantitatively measure the influence that this reform has on the overall efficiency of rural cooperatives and the asset quality in northern Jiangsu Province; Second, to quantitatively measure the influence this reform has on the behavior of supporting agriculture, rural areas and farming households from two perspectives including agricultural loans and farming households loans; Third, to theoretically analyze the corporate governance in rural cooperatives and establish possible path to reduce their acting costs and realize the balance between profitability and supporting agriculture, rural areas and farming households.The overall objective of this research is to systematically analyze the reform performance of rural cooperatives in northern Jiangsu Province with theoretical and positive methods so as to offer reference for deepening the rural cooperatives reform nationwide and making policy for improving the development of rural finance system. According to the objective, the contents of research are as follows:First, to review relative theories and practices concerning institutional reform and development of rural finance both at home and abroad and analyze the theoretical basis of rural cooperatives reform as well as the specific policy objective of reform in northern traditional farming regions;Second, quantitatively analyze the reform's influence on the overall efficiency and asset quality of itself: to evaluate property rights reform's net influence on the overall efficiency of rural cooperatives with DEA and general DID model and break down the working mechanism of reform through the channels of income per capita and cost per capita in rural cooperatives; and anlysis the reform's net influence on bad loan and capitalism;Third, quantitatively analyze the reform's influence on the intensity of rural cooperatives' role in supporting agriculture, rural areas and farming households: to clarify the mechanism of difference between credit cooperative unions in counties and rural cooperative banks in northern Jiangsu based on three research perspectives including rural funds outflow, agricultural loans and farming households' loans;Forth, to design proper institutional frame and solve the tough problems that still exist in the new round reform.The conclusions are as follows:(1)The reform leads to an overall efficiency net increment of rural cooperative banks of 0.0072, which means reform has helped rural cooperative banks enjoy a greater increment in overall efficiency, compared with credit cooperative unions which haven't participated in the reform. This indicate that the transformation from rural cooperatives to rural cooperative banks in traditional fanning regions has reached the original goal of improving management to some extent though the improvement isn't great enough, which means the effect of reform still isn't significant; Under the joint-stock cooperative system, the operating income per capita in rural cooperatives has significantly increased with an average increment of 19700 yuan compared with the level before the movement of reform; At the same time this variable has passed the significance test; Under the non-joint-stock cooperative system, the operating income per capita in rural cooperatives has significantly increased as well, with an increment of approximately 7400 yuan compared with the level before the reform.(2)The bad loan and capitalism ascends according to the reform; After the property rights reform, the bad loan rate decreased by 12%; the capitalism rate increased by 10%.(3)The rural cooperatives have reduced the input of agricultural loans after the reform and the credit cooperative unions in counties play a greater role in supporting agriculture, rural areas and farming households; Generally the agricultural loans of rural cooperatives are efficient from 1996 to 2006 through allocation efficiency model of credit funds; According to the results of Chow-test, the improvement is not significant while with the continuation of reform, the effect of promoting allocation efficiency of agricultural loans in rural cooperatives will gradually be strengthened.(4)This dissertation accurately and objectively assesses the extent of financial depression of sampling farming households using simultaneous discrete choice model; Results from positive analysis show that the extent of financial depression offarming households P(Y₂^* >Y₁^* /Y₂^* > 0) (the extent to which demanding amount isnot satisfied) is 66.7%; Under the circumstance when other control variables of sampling farming households remain the same, it is more difficult for the credit fanning households under the cover of rural cooperative banks to obtain loans and the performance of new round rural cooperative reform in supporting agriculture, rural areas and farming households is doubtable in the surveyed area.(5)The agency model show the provincial credit cooperative union should reduce the variance of supervision intensity towards rural cooperatives and avoid using improper intervention that is either too great or too small, instead, it can adopt constant supervision and pursue balance between profitability and supporting agriculture, rural areas and farming households by reducing acting costs, increasing share ratio in combination with profit objective of rural cooperatives; When there isn't enough incentive for managers, the external shareholders can increase the shareratioβfor managers so as to make their risk reference become similar to that ofshareholders and increase output, reduce acting costs while promoting the striving force of managers.