Study On The Relationship Between The Western Rural Financial Development And Rural Economic Growth

Finance as an important capital elements of the configuration system, play an important role in China’s economic grow. Rural finance as an important part of finance, play an important role in rural economic growth also. The development of rural financial is playing an increasingly important role in promoting the growth of the rural economy. In order to promote rural economic growth, development the rural finance, increase the supply of money in rural areas, improve the rural financial service system, strengthen the supervision in rural financial which has become the consensus of many theoretical researchers.Since reform, China’s economic level has been greatly improved, but the urban-rural dual economic structure is formatted during these years, urban-rural income gap is becoming widening and widening. Financial policy preferences of the urban industrial sector led to the supply of rural financial severely inhibited, existing rural financial institutions can not meet the development needs of the rural economy. There are many defects in formal rural financial institutions, such as the rural credit cooperatives inefficient、lack of internal control. Agricultural Bank of China and the China Postal Saving Bank merging a large number of branches which below the county level, and inefficient. In summary, rural financial institutions must carry out a series reform and innovation, in order to promote rural economic growth. In order to promote the growth of rural economy in the western region, need to further analysis and discussion the western rural financial development as well as the existence of various problems. Study the relationship between western rural financial and western rural economic growth has a positive role.Based on panel date of11province of the western rural areas, using a fixed effects model, the index which used to measure economic development in the western rural are agricultural development farmer’s per capital net income、agricultural output value, the index which used to measure financial development in the western rural are financial development scale、financial development efficiency、financial development structure. Using Eviews5.0to analysis. The results show that:western rural financial has been promoting the growth of western rural economic, but the effect is very little. Take the indicators of financial efficiency for example, the efficiency of financial development for every1%increase, rural GDP increase by0.43%.