The Empirical Study Of The Development Of Chinese Rural Finance Impact On The Urban-rural Income Gap

Since the policy of reformation and opening，Chinese economy has been developeddramatically. At the same time， the income gap between urban and rural residents has alsoexpanded significantly which becoming a social problem concerned by community andgovernment. From the existing theoretical studies， we conclude that Chinese financialdevelopment is one of the important factors of the expanded income gap between urban and ruralresidents. It has important practical significance and theoretical value to analyze how the ruralfinancial development could influence income gap.First，we review studies on financial development and urban-rural income gap andsummarized different perspectives and points of view on this study. Then based on the reviewingof the development gap between urban and rural areas and rural finance history，we study thereasons for the slow financial development in rural China. We explain the impact ways andmeans of financial development in rural China on urban-rural income gap from a theoreticalpoint of view.In empirical part，we select29Chinese provinces panel data since the reform and openingup in1978.Based on the foreign classic model，we analyze the scale， structure， efficiency offinancial development in rural China and selected the control variables may affect the economiclevel of the income gap between urban and rural areas，such as the economic level， educationlevel， fiscal spending. By using the fixed effects panel model to analyze the impact of Chineserural financial development on Chinese urban-rural income gap，we draw the conclusions thatthe scale of rural financial development and rural financial development efficiency expandedincome gap between urban and rural areas by the outflow of funds，the improvement of ruralfinancial structure narrowed the income gap between urban and rural by reducing the urban-ruraldual degree of financial structure. Finally，we offer some policy recommendations such ascoordinating financial development in urban and rural areas， further improving the efficiency ofrural financial development， increasing the investment in agriculture and make further researchdirections outlook at last.