Empirical Analysis Of Financial Institutions, Agricultural Credit Inputs And Agricultural Gdp Relationship

Agriculture is a fairly important sector in overall Chinese economy. Capital investment playsan important role in the development of agriculture. Capital earmarked for agriculturemainly come from investment of national treasury department and credit of financialinstitutions. Credit of financial institutions has been one of the most important sources ofagriculture investment. Theoretically, agricultural credit that is allotted for either short termoperation capital or long term investment will accelerate the gross production of agriculture.This paper intends to analyze the relation between agricultural credit and agricultural GDPwith empirical approach. This paper uses the time series data from the first quarter of 1994to the forth quarter of 2005 to analyze the relation between agricultural credit andagricultural GDP by employing the co-integration analysis. The results indicate thatagricultural credit and agricultural GDP are co-integration correlation, and that they havelong-term stable relations. The paper also concludes that the agricultural credit has positiveeffects on the agricultural GDP. The results of the paper will support the policy of increasingmore agricultural credit to enhance the gross production of agriculture.