Theoretical Analysis And Test On The Influence Of Social Capital On Farmers' Takeover

Consecutive years of No.1 documents of the Central Committee have stressed the importance of accelerating the innovation of the rural financial system and the reformation of rural finance. However, rural households’financial demand is far from being met according to the current situation of China’s rural formal credit. Both their access to credit and amount of credit have been constrained. The existence of information asymmetry and the lack of effective lending technology are the major factors behind the phenomenon. Hence, discussing the theoretical feasibility of substituting social capital for mortgage according to the actual situation of China’s rural credit, and revealing the factors include social capital which have an influence on rural households credit behavior are of vital theoretical and realistic significance.This article is based on three theories:"Financial Repression", "Information Asymmetry" and "Relationship Lending", and also latest research on rural households’ credit behavior. Firstly, the theoretical feasibility of substituting social capital for mortgage is verified by bringing social capital into theoretical analysis model. Compared with the mortgage loan condition, social capital can more effectively improve households’ credit availability. Then we summarize the mechanism of social capital accordingly. Secondly, the statistical description of the survey data from 11 provinces of western China is done in order to understand the basic situation and credit condition of rural households. Based on these, influences of social capital on the rural households’ credit behavior is investigated from the aspects of credit availability and credit demand gap. And then we can determine the mechanism of elements in the progress of borrowing.The empirical results show that:collateral can neither increase rural households’ credit availability, nor reduce the credit demand gap; social capital has significant effect on credit availability, while family characteristics have significant effect on credit demand gap; different levels of social capital have different effects on credit availability; and the impacts of financial resources and political resources have more significant influence on credit availability. Lastly, combined with the characteristics of rural households’ credit behavior and the conclusion of theoretical and empirical research, the article puts forward policy proposals on improving rural households’ credit behavior from the view of rural households, the government and the rural credit cooperatives.