Empirical research on the relationship between rural finance development and rural economic growth: A case study of China from 1978 to 2011

Rural financial development has played a vital role in the process of agricultural economic growth. This article explores the relationship between rural financial development and agricultural economic growth by utilizing China’s time series data from 1978 to 2011. The empirical result shows that there is a long-run equilibrium relationship between China’s rural financial development and agricultural economic growth, and the rural financial development has a negative effect on agricultural economic growth. RFD is the Granger Cause of AEG in 10% significance level. Based on these empirical results, some rural financial service policies have also been proposed so as to ensure the smooth running of the rural economy.