Research On The Credit Supply Of Commercial Bank To Agricultural Total Factor Productivity Improvement

Agriculture,rural areas,and rural people are keys and difficulties in solving issues relating to imbalance and inadequacy of development.Enhancing agricultural total factor productivity(agricultural TFP hereafter)is critical to high-quality development.It is realistic that China improve agricultural TFP through transforming agricultural production from traditional small-scale peasant mode into division of labor and cooperative production based on industrial chain and agricultural industrialization.As the core of modern economy,finance should not only satisfy funds demands in agricultural development,but serve as adhesive role to promote agricultural production mode transformation through serving firmly.However,credit supply of commercial banks has shortcomings in their operating notion,capability and efficiency when supporting agricultural production mode transformation at present.In this context,this dissertation makes a relatively comprehensive investigation on commercial banks’ credit supply to agricultural TFP improvement from the perspective of productional division.This dissertation reviews and combs literature involving the nexus between credit and productive forces development,the relation between credit and productional division,the association between agricultural productional division and agricultural industrialization,the nexus between credit and agricultural TFP,and influencing factors of the credit effectiveness.Based on that,the theoretical mechanism through which credit supply of commercial banks enhances agricultural TFP is explained.Specifically,credit supply of commercial banks,in the form of both scale but efficiency,promotes productional division in agriculture based on industrial chain and agricultural industrialization through supplementing productional funds,enlarging market scope and decreasing information asymmetry,brings resultant innovation in producing factor combination and advanced techniques popularization,thus enhances agricultural TFP.On basis of structural agricultural-related credit,how supply of agricultural related credit product and service,rural banking institutional supply and structural monetary policy supply affect the credit effectiveness in agricultural division of labor is discussed.Applying F?re-Primont index,agricultural TFP is estimated and the characteristics in time,region and structure are analyzed,which is used to conclude problems in promoting agricultural TFP and enlightenments in commercial bank’s credit supply.As for time characteristics,Chinese agricultural TFP grew from 0.6856 to 0.8911,showing an obvious upward trend.In terms of spatial characteristics,agricultural TFP level in eastern region is higher than central and western regions and the gap among them has enlarged while the growth ratio is highest in western region.As for department’s characteristics,TFP growth of midstream agricultural producer is greater and shows higher balance in the later period compared to upstream.At present,Chinese agricultural TFP face the problems of geographic imbalance,department imbalance and downward trend in agricultural scale-mix efficiency.Employing method in statistical analysis and empirical analysis,the effect of credit supply scale and credit supply efficiency on agricultural TFP as well as their conduit based on productional division are examined respectively with Chinese data sample from 2009 to 2020.In particular,enlarging credit supply scale deepens productional division based on agricultural industrialization,and bring agricultural TFP increase while the effect of credit supply efficiency is not obvious yet.The factors involved with credit supply efficiency is investigated then in the scope of agriculture-related structural loan.Providing credit to the agriculture,rural areas,and rural household,the loan structure,branch structure and staff structure inside commercial banks influence the its effectiveness in promoting agricultural TFP increase.Based on Cobb-Douglas production function,the theoretical conduit of how credit supply oriented to agriculture,rural areas,and rural people in commercial bank promote agricultural TFP is demonstrated.Employing provincial data sample from 2009 to 2018,the effects of loan structure,branch structure and staff structure on agricultural TFP are examined respectively.Generally,Credit supply oriented to agriculture,rural areas,and rural people drive the transformation in agricultural production mode from self-sufficient into productional division and cooperation,bringing result agricultural TFP increase.But this type of credit supply hasn’t shown great efficiency in solving problem of geographic imbalance.From the perspective of structure in credit supply,the proportion of farm credit,proportion of rural credit,branch expansion of rural commercial bank and its services exert obvious effect on the credit effectiveness in promoting agricultural TFP.In specific,commercial bank enhance the supply of rural credit and farm credit play a more beneficial role in agricultural TFP growth compared to agricultural credit supply increase.Rise in proportion of branches and staff in rural commercial bank promote the productional division and accelerate the increase of agricultural TFP.And the expansion of village banks improves agricultural scale-mix efficiency.The combination of ownership and control is covered by rural banking institution supply,which provides impetus and restrictions to the credit supplying behavior of commercial banks in agricultural production and thus affect its effectiveness in supporting agricultural and rural development.Based on relevant principle in system theory,principle of system isomorphic incentive compatibility is proposed.This principle is applied to explain after the mode of one-member-one-vote is transformed into one-share-one-vote,rural commercial bank based on joint-stock system and relative concentrated corporate governance can be isomorphic to agricultural industrialization based on productional division and cooperation in terms of targets,management methods,risk control,market operation and so on.On basis of convergence of objectives and interests,rural commercial bank can coordinate with agricultural industrialization,thus enjoy benefits from win-win and promote agricultural TFP growth through this synergism.Empirical analysis with 2005 to 2017 provincial data samples also shows an upward trend in coupling coordinate degree between agricultural industrialization subsystem and rural commercial bank subsystem,which promote agricultural TFP increase.Comparing to eastern and central region,their coordination and synergism bring greater TFP increase in western region,relieving geographic imbalance problem.Structural monetary policy guides credit funds flow to specific scope,bringing credit supply effectiveness increase.Employing credit creation theory,the theoretical mechanism through which targeted cut in required reserve ratio(RRC targeted cut)affects credit supply and agricultural TFP is demonstrated.Central bank decreases the required reserve ration specialized commercial bank,support agricultural production transforming into the mode of division and cooperation.Empirical analysis applies provincial data sample from 2009 to 2019 and shows that RRC targeted cut has promoted agricultural TFP growth wholly.On basis of incomplete contract theory,the reason why the effect of RRC targeted cut policy might show differences among agricultural productional departments.Information asymmetry and excessive regulation cost and other factors bring the separation of ownership and control rights in specific supporting scope of policy credit,namely the problem of residual control right arrangement.Commercial bank might seize the benefits from residual control right based on more information,which weakens the supporting effect of policy on upstream producers,like peasant and shows structural effect in the policy.Empirical analysis shows that the RRC cut policy brings the agricultural midstream department TFP increase more effectively than the upstream department.According to basic tendency of agricultural economics,existing problem in agricultural improvement,and efficiency and deficiency in credit supply of commercial bank,the advice related to how to promote agricultural TFP with credit supply in commercial bank is proposed.First,setting up development notion of exploitation-oriented inclusive credit.Second,based on agricultural production division,building credit supply system in commercial bank.Third,promoting the supply-side credit structural reform of commercial banks in the field of agriculture,rural areas,and rural people.