An Empirical Study On Relationship Between Rural Financial Development And Rural Economic Growth

In the long-term dual economic system, how to promote the coordinated development of rural and urban become an important issue.Concerned about the growth in the rural economy, the role of rural finance is considered one of the core issues. In recent years, more and more emphasis on the development of rural finance, the State Council recently issued the Opinions on rural financial services, urged financial service "three rural" for the revitalization of rural economic growth.This article first summarize financial development,rural finance and other related theories, then describe the current development of China’s rural finance, rural economic development through data description and analysis the important indicators by comparing recent and relevant systems analysis, summed up the current problems of rural finance: For system inherited and many other reasons, the relatively exogenous rural finance play a limited role on rural economic development.Financial supply theory and financial needs theory were summarized from different angles the financial impact of the development on economic growth, then the rural areas of our country in the moment, what kind of relationship exist between the rural finance and rural economic growth? In this paper, using multivariate VAR analysis, do cointegration test between economic growth variable and three financial development variables, they are scale variable, efficiency variable and structure variable. Establish a vector error correction model, using Granger causality tests to test relations between economic growth variables and rural finance variables.Empirical analysis of rural problems because the data complex, different caliber, different conclusions indicators selected will be different, this paper summarizes the basis of previous literature, the selection of indicators, either GDP or rural financial development indicators selected with the current situation of our country, and has practical significance. In the end, based on theoretical and empirical research, making recommendations for the development of China’s rural financial problems. In order to make coordinated development between rural finance and rural economy, and promote healthy development of the rural economy.