EMPIRICAL ANALYSIS OF THE RELATIONSHIP BETWEEN DEVELOPMENT OF RURAL FINANCIAL SYSTEM AND RURAL ECONOMIC GROWTH
Free (open access)
Volume 9 (2014), Issue 3
464 - 471
This article investigates the relationship between the development of the rural financial system and the ACP economic growth. The vector error correction model, co-integration method and impulse response function are used to analyze the data. This article does the systematic empirical and quantitative research from the three aspects of the financial system: its scale, structure and efficiency. This research shows that it has the equilibrium co-integration relationship and long-term one-way Granger causality between them. That means rural financial system efficiency, rural financial deepening, and improvement of the structure of the rural financial system can increase the growth of rural economy, agricultural development and peasants’ income significantly. Therefore, it is necessary to increase the efficiency of rural financial institutions and to improve the rural financial system structure and security of the rural financial system to maintain rural economic growth, agricultural development and farmers’ income.
Rural financial system, ACP economic, VEC model, co-integration