Influence of Rural Financial Institutions on the Progress of Rural Technology

Abstract

Technological progress is the key factor to influence economic growth. This article uses Empirical Analysis to analyze the relationship between rural technological progress and rural financial institution and finds that there exists one-way causal relationship between them in China. The progress of rural technology can promote the development of rural financial institutions, but the development of rural finance has not brought the progress of rural technology. It is necessary to deepen the reform of rural financial institutions, to promote the progress of rural technology. KEYWORD: Rural financial institutions; Rural technological progress; One-way causal relationship International Conference on Industrial Technology and Management Science (ITMS 2015) © 2015. The authors Published by Atlantis Press 182 technological innovation, the liquidity and size of the stock market are promotion to technological innovation. Liu Jia (2008) makes an empirical analysis and finds the organization and activeness of financial system do not have obvious impact on technological innovation. However, the improvement of efficiency which financial system promotes technological innovation root in the financial system enlarges the input of technology, but the management efficiency is decreasing. Based on the above research about this topic, we can easily find out the development of rural financial system is important to rural technological innovation. The rural financial organizations are established mainly aiming at the actual situation of our countryside and they can promote the progress of all aspects in rural to some degree. Meanwhile the rural technological progress will perfect the rural financial system extremely efficiency. But in practice, there exist many problems in rural financial organizations. So we need to support the rural financial organization, continue to deepen the reform, perfect the rural financial organization, enhance the competitiveness of rural finance to a larger extent, increase its impact on rural technology, finally achieve the sustainable development of rural economy, and work out issues of agriculture, farmer and rural areas problem. This article chooses the rural financial organization and rural technological progress as the research objects, makes empirical analysis on their relationship, studies the mechanism and characteristic of rural financial organization, puts forward that we can promote the rural technological progress to enhance sustainable development of rural financial organizations and perfect rural financial system, provides new development ideas about the distribution of rural financial organization and rural technological progress, enhances the relationship between these two issues, which can promote the rural financial organization serve for rural technological progress more efficiently and quickly, changes the one-way causation of these two issues, and contributes to the development of rural area in China. 2 VARIABLES SELECTION AND DATA SOURCES 2.1 Variables selection 2.1.1 The total power of agricultural machinery (TPAM) The total power of agricultural machinery refers to the total power of power machineries of Agricultural, forest, animal husbandry and fishery, including tillage machineries, irrigation machineries, harvesting machineries, agricultural transport machineries, plant protection machineries, animal husbandry machineries, forestry machineries, fishery machineries and other agricultural machineries. This shows the progress of rural technology in theory, but the technology is not directly transformed into the farmers' productivity. It can greatly improve the agricultural land productivity, labor productivity, product commercialization and the utilization rate of resources to carry out technological transformation and upgrade of traditional agriculture with modern science and technology, Therefore, the degree of agricultural mechanization is the reasonable index to reflect the level of agriculture technology. This article selects agriculture machinery total power (TPAM) to measure the progress of rural technology. 2.1.2 The rural financial interrelation ratio (RFIR) Financial interrelation ratio is the ratio of the value of financial assets and total economic activity in the country at a certain date. This article emphasizes on the influence on the progress of rural technology and the development of rural financial institutions. Therefore, the financial interrelations ratio (RFIR) is simplified to the rural financial institutions loans / rural GDP, which is used to measure the development of rural finance in china.