Analysis To The Relationship Between Urban And Rural Financial Binary Structure And Urban And Rural Income Gap

With the rapid development of economy after reform and openness, duality ofurban and rural financial structure is becoming increasingly serious and urban andrural income gap indicates the trend of overall expansion. In the current time aimed atharmonious society, how to decrease urban and rural income gap has been mentionedto a high degree of policy. Improving urban and rural financial binary structure is aneffective way of reducing urban and rural income gap as financial development hasimportant effect to residential income.After the systematic study has been done on the issue concerning urban and ruralfinancial binary structure and urban and rural income gap, this paper analyze thepresent situation of urban and rural financial structure and urban and rural incomedeeply and point out that imbalanced distribution of urban and rural financialinstitutions、 the large gap between the diversities of urban and rural financialinstruments and the imbalance of urban and rural financial asset scale and quality arethe main characters of urban and rural financial binary structure. Then the theory ofthreshold effect and the theory of rural finance restraints are used to systematicallyanalyze the correlation and influencing mechanism of urban and rural financial binarystructure and urban and rural income gap. Based on this research and taking thepresent situation of China overall bank generated financial structure intoconsideration, the urban and rural loan structure index CLL(RCC loan/financialinstitutions loan)、the imbalanced scale of urban and rural financial developmentindex FDG-(rural loan/rural GDP)/(urban loan/urban GDP) and the imbalancedeffectiveness of urban and rural financial development index FEG-(rural deposit/ruralloan)/(urban deposit/urban loan) are defined to reflect the urban and rural financialbinary structure; the rate between urban and rural income ING are selected to reflectthe gap between the urban and rural income. Econometrics are use to do empiricalanalysis to the interrelation between the urban and rural financial binary structure andurban and rural income and the results indicate that: urban and rural loan structurewill expand the urban and rural income gap; the imbalanced scale of urban and ruralfinancial development will decrease the urban and rural income gap; the imbalancedeffectiveness of urban and rural financial development will expand the urban and ruralincome gap. According to the theoretical and empirical analysis result, the policy suggestions of establishing multilevel and wide rural financial system, optimizingrural financial ecological environment, innovating rural financial service model aswell as enforcing policy support and supervision to rural finance are put forward withthe expect of doing good to reducing urban and rural income gap.