Abstract
Rural development is critical to raise rural living standards and reduce income differences between urban and rural areas. Much literature has explored factors that could affect rural development, and we investigate the effects of bank presence in rural areas on rural income. Using Chinese provincial-level data from 2005 to 2017, we quantify the effects of bank presence on rural income. Specifically, we use the number of banks per town to measure bank presence and use rural income per capita of each province to measure rural income. With the ordinal least square model and dynamic panel estimation, we find that bank presence increases rural income. Rural income increases the same year with banks appear in town, and the effects of bank presence last for years on rural income. However, we do not find significant evidence that bank presence in rural areas also contributes to the reduction of the income difference between urban and rural areas.
Highlights
2019; Kiryluk-Dryjska and Beba, 2018; Koopmans et al, 2018; Rural development has been one of the key issues for Furmankiewicz et al, 2016; Carter et al, 2019) and agricultural increasing rural income and reducing income differences programs such as electrification
To examine increases rural income immediately, the following concern is the subsequent effects of bank presence on income difference what are the effects of bank presence on rural income in the between urban and rural areas, we contain the lagging terms of following years? We examine the effects of bank presence in the number of banks per town into the model, as the results are rural areas on rural income in the following years by including shown in columns (4) to (6)
Rural development contributes to rural living the number of banks per town on rural income, which means standards increase and poverty reduction
Summary
2019; Kiryluk-Dryjska and Beba, 2018; Koopmans et al, 2018; Rural development has been one of the key issues for Furmankiewicz et al, 2016; Carter et al, 2019) and agricultural increasing rural income and reducing income differences programs such as electrification Be positive to rural economic growth, and Wang et al (2019) Kouretas and Tsoumas (2016) found that foreign bank found that urban-biased land development policy could enlarge presence exerts a positive effect on the efficiency of business the urban-rural income gap. Urbanization and regulations, and Gopalan (2016) argued that foreign bank geographic factors affect rural development Yuan et al stock markets could promote growth, and banks have a more (2018) argued that urbanization can benefit higher value powerful effect on growth. Li et al (2019) and Smith et al (2019) argued that stock markets support faster economic growth than found that nearby urban demand, local entrepreneurship, and other financial intermediaries Agricultural enterprises. Li et al (2019) and Smith et al (2019) argued that stock markets support faster economic growth than found that nearby urban demand, local entrepreneurship, and other financial intermediaries
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