Empirical Study Of The Relationship Between Financial Development And Growth Of Farmers’ Income In China’s Urbanization Process

In recent years, the absolute number of income gap between urban and rural areas is widening gradually, urban residents’ income rises significantly higher than that of the farmers’. In order to increase the farmers’ income, it is necessary to fully exploit the potential income growth in the agriculture, develop rural secondary and tertiary industries’ income growth space, widen the growth channel of the external rural income and increase the intensity of policy to increase the farmers’ income. In addition, the central NO.1 file have been focusing on the problem of "agriculture,rural areas and the farmer" for 12 consecutive years, which shows the central committee of the party and the state council have been paying attention to the countryside, agriculture and farmers problem. Under the new normal economy, the current economic state grew into high-speed growth state, strengthening the position of agriculture as the foundation of the economy, promoting the farmers’ income keeps growing and narrowing the income gap between urban and rural areas is not only the key work of the government, but also an important issue which urgently to be solved in academia. Therefore, through reading the related theory of farmers’ income and financial development and on the basis of predecessors’ theory research, this paper combines with the specific situation of economic development in China to analyze the changing process of our country farmers’ income level and structure changes of the farmers’ income, which found that the growth of farmers’ salary has increasing influence on the farmers’ income growth and the salary accounted for a increasing proportion of farmers’ income. Then, this paper analyzes the influencing mechanism of financial development on the farmers’ income and the empirical result by looking up the relevant data about the financial development and farmers’ income in the urbanization process and using the vector autoregressive model to examine the relationship between them, which proved that the scale of financial development, the efficiency of financial development, urbanization rate, the intensity of financial support in agriculture and the income per farmer have a long-term equilibrium relationship between them, moreover, the efficiency of financial development, the urbanization rate and the intensity of financial support in agriculture have the positive correlation with the net income per capita. The relationship between financialdevelopment scale, financial development efficiency, urbanization rate, the intensity of financial support in agriculture and the net income per capita of the farmer is granger causality. The scale of financial development and the intensity of financial support in agriculture have a similar effect on net income per capita of the farmer in the process of urbanization, whose early influence is mainly positive, but as time going by, the influence of the late is negative. The efficiency of financial development and the urbanization rate also have a similar effect on net income per capita of the farmer, whose early influence is negative, but have a stable positive impact as the time going by. The contribution rate of the scale of financial development, the efficiency of financial development, urbanization rate and the intensity of financial support in agriculture to the growth of net income per capita of farmers is rising. In addition, the intensity of financial support in agriculture has the biggest contribution rate. Comparing with the scale of financial development, financial development has a relatively bigger contribution.