A Study on the Effectiveness of Financial Supports to the Entrepreneurship of Farmers—Based on the Data from 1978 to 2011 in China

Xinzhi Liu^1*, Lu Li², Chunyan Du², Yusong Liu²

¹Rural Economics and Management Research Center of Southwest University, Chongqing, China.
²College of Economics and Management of Southwest University, Chongqing, China.

DOI: 10.4236/ajibm.2014.49058                

Abstract

We use a fixed effect variable coefficient model to analyse effectiveness of financial supports to the entrepreneurship of farmers, based on the data from 1978 to 2011 in China. Results show that due to the significant differences in regions among farmers’ entrepreneurship, the demand of rural financial supports for the peasants’ entrepreneurship is distinct; the different rural financial supports for farmers’ entrepreneurial also exist. The financial supports of developed eastern provinces to the entrepreneurship of farmers are effective, while that of the underdeveloped provinces in middle and western China is opposite. At last, focusing on market failure that farmers in poor areas encountered, like the rural imperfect financial system, the credit guarantee system, the asymmetric information and high transaction cost, some suggestions are given in this paper, such as the encouragement of the micro-finance for farmers’ entrepreneurship, standardizing and guiding the informal finance for farmers’ entrepreneurship and the establishment of risk fund for farmers’ entrepreneurship.

Keywords

Entrepreneurship of Farmers, Financial Supports, Panel Data, Variable Coefficient Model

Conflicts of Interest

The authors declare no conflicts of interest.

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