Bootstrap Simulation Study on Cooperation between Agricultural Insurance and Agricultural Credit

Zhiwei Wang

Asian Agricultural Research, 2017, vol. 09, issue 05

Abstract: The economic compensation function of agricultural insurance can reduce the credit default risk of farmers. Therefore, the cooperative development of agricultural insurance and agricultural credit is an inevitable trend for the development of rural financial services. In this paper, the annual time series data of agricultural insurance and agricultural credit in 1994-2013 were used to carry out bootstrap simulation based Granger causality test and make the impulse response analysis. Results indicate that based on the Granger causality test of the whole samples (1994-2013), there is no Granger causality relationship between agricultural insurance and agricultural credit; based on the test of sub-samples (2002-2013), there is a two-way Granger causality relationship between agricultural insurance and agricultural credit, the rapid development of agricultural insurance brings about structural changes in agricultural credit; agricultural credit has a positive effect on agricultural insurance, and agricultural insurance has a greater effect on agricultural credit. Finally, it came up with policy recommendations for the cooperative development of agricultural insurance and agricultural credit.

Keywords: Agribusiness (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ags:asagre:262801

DOI: 10.22004/ag.econ.262801

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