Research On The Mechanism And Effect Of Private Finance Development To Alleviate Poverty

Since the reform and opening up,China's economy has undergone earth-shaking changes.In 1978,China's GDP was 367.87 billion yuan,and in 2016,it reached 74412.72 billion yuan,or about 200 times.Thanks to the enormous economic progress,China's per capita consumption level from $183.97 in 1978,rose to 21228 yuan in 2016,at the same time our country poverty also greatly reduced,but because of China's big population base,to 2016 rural poverty population 43.35 million people are still in our country,it has become the concern of the party and the country of one of the major livelihood issues.The development of folk finance plays a huge role in the slowdown of poverty.First of all,the folk finance can improve the efficiency of resource configuration,and by allocating capital more efficiently,increase the number of physical capital,improve the ability of technology innovation,speed up industrial upgrading,thus effectively promote economic growth;Second,the poor can make their own human capital investments by financing private sector finance,earning higher incomes and narrowing the income gap with the rich.Therefore,the study of the relationship between private finance and poverty reduction has been paid more and more attention by researchers in recent years.But the existing research on the relation between financial development and poverty to slow literature,more concentrated in the formal financial development and slow down the relationship between research on poverty,for the folk financial development and poverty to slow the progress of the relationship between research is relatively small.To make up for the shortage of the existing research,this paper takes the folk financial development and slow down the research emphasis on the relationship between poverty,and detailed analysis of the mechanism of action between them,this to alleviate poverty in China to provide a new way of thinking,based on this put forward policy Suggestions will also has the reality guiding sense.This paper studies the relationship between private financial development and poverty reduction,and analyzes the mechanism of the impact of private finance development on poverty reduction.We use the regional social investment in fixed assets or rural fixed asset investment in the sum of self-raised funds and other funds accounted for,small loans company activity,the central bank released folk lending interest rates three indicators to measure the folk financial development level;Using per capita consumption level as a measure of poverty reduction to study the relationship between it and private finance;At the same time,we control the development level of formal finance(LOA).The economic growth(AGRO)and income distribution(ID)will also be used as regression variables in the two ways of the impact of private finance on poverty reduction.In addition,we add the relevant control variables in the regression equation: the degree of foreign trade(FORTR),human capital(CAP),inflation(CPI),the urbanization level(URB),infrastructure(INFRA)and agricultural development level(TAG).In the robustness test part,we use poverty rate and the gini coefficient of each province to measure the stability of poverty reduction and income distribution.This paper studies the relationship between private financial development and poverty reduction by constructing dynamic panel model.In order to study the mechanism of the development of private finance to alleviate poverty,we also established dynamic panel model to study it.In order to be able to well solve the problem of endogenous,we use the estimation method of generalized according to the established model to estimate,before using the system of generalized estimated method,we first to model the disturbance exists autocorrelation and test the tools used by variable effectiveness.After testing,we found that the disturbance terms of all models are not self-related phenomena,and all instrumental variables are valid.In the process of empirical analysis,we use three first weigh the development of private financial indicators on the relationship between the folk financial development and poverty to slow to return,and then the regression test results of robustness.In the regression equation,we join the economic growth and income distribution are two variables mediation mechanism,so that we can be concluded that the folk financial development on poverty slowed as a result,the influence of the economic growth and income distribution are two mediation mechanism to slow down the role of poverty.And then the economic growth and income distribution mechanism of the two variables as explanatory variables,to explore the folk financial development to economic growth and income distribution,the influence of it is concluded that the folk financial development impact to slow the mechanism of action of poverty.The main conclusions of this paper.First,there is a positive correlation between the development of private finance and the slowdown of poverty,that is,the development of folk finance is conducive to poverty reduction,and the effect is significant.Economic growth and income distribution are positively correlated with poverty reduction.Secondly,through the mechanism of action of on folk financial poverty alleviation were analyzed,and found that the folk financial development through economic growth and income distribution two ways to reduce poverty,the folk financial development can promote economic growth,private negative relationship between financial development and income distribution.