The Relationship Between The Density Of Rural Financial Institutions And The Income Of Rural Residents

A mature rural financial market couldn't only smooth the economy,but also could effectively reduce the liquidity restrictions on the rural economy.It is played a positive role to increase the income of farmers and to promote the development of rural economy.There is a huge gap between China's rural financial sectors,the financial reduction and welfare losses in farmers and rural small micro-financial are very serious,the rural financial market has been inefficient operations,the Chinese government has also continued to promote the reform and innovation of rural financial system,so the rural finance Institutions has made rapid development in the past 10 years.In this paper,through the study of the relevant theories of rural finance and peasant income,the relationship between the network density and the asset density of rural financial institutions and the net income,operating income and disposable income of rural residents is first transferred from the employees of rural financial institutions Density and asset density with the net income of rural residents,operating income and disposable income.Then,we are studied the regional density and the asset density of different regions in terms of net income,operating income and disposable income of rural residents.Moreover,the research that ruled out the reverse causality shows that there is a positive causal relationship between the two variables,and the increase of the density of financial institutions can promote the income growth of peasants.The results show that the increase in network density and asset density of rural financial institutions will effectively increase the farmers' net income,operating income and disposable income,which means increasing the number of financial institutions and the investment of funds in rural areas could increase the farmers' income.Robustness tests show that they have a reliable positive correlation;sub-regional heterogeneity of robustness tests show that increasing the number of financial institutions and capital investment in east regions will add the net income of local farmers more significantly,while increasing the number of rural and rural financial institutions in the central and western regions can effectively increase the income of farmers.While increasing in capital investment in unit area,there is no significant relationship to the increasing of the income of the famers.The reason is mainly due to the fact that the west regions are dominated by mountains and hills,which is not Suitable for the mechanized operations.So,even there is huge investment of funds has a very limited effect on farmers' income.