The Income Effect of Inclusive Finance on Farmers:Evidence from Rural Banks
Rural banks were established with the aim of fostering inclusive finance in rural areas,promoting rural development,and addressing challenges such as limited financial institution coverage,insufficient financial supply,and lack of competition.Despite these goals,there is limited literature directly addressing these issues.This paper leverages county-level statistics and rural fixed observation point data from China,employing a multi-time point difference-in-differences model to investigate the impact of rural banks on farmers'income.The main findings are:(1)The establish-ment of rural banks enhances the supply of financial resources and spurs economic growth at the county level.(2)The di-rect income-boosting effect of rural banks predominantly benefits farmers who operate enterprises(i.e.,new agricultural operators),as rural banks significantly increase the number of such operators,including farmer cooperatives and family farms.(3)Rural banks also indirectly elevate the income of ordinary farmers through the spillover effects of family farms,facilitating joint income growth.(4)The synergistic impact of digital inclusive finance and the establishment of village banks significantly enhances the income levels of ordinary farmers.These results offer policy implications for promoting the high-quality development of inclusive finance and ultimately achieving common prosperity.
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