Rural financial development, agricultural mechanization, and total factor productivity

Wenbin Min

Finance Research Letters, 2025, vol. 79, issue C

Abstract: This paper empirically examines socioeconomic variables across 30 provincial administrative regions in mainland China from 2010 to 2020, analyzing the impact of rural financial development on agricultural total factor productivity (TFP) and the mechanisms underlying this relationship. The findings indicate that rural financial development significantly enhances agricultural TFP. Mediation analysis further confirms that this effect occurs primarily through the promotion of agricultural mechanization. Additionally, heterogeneity analysis reveals notable regional disparities: the western region experiences the most substantial boost in agricultural TFP from rural financial development, followed by the central region, whereas the eastern region sees a comparatively smaller effect. These results indicate the presence of distinct regional variations in how rural financial development influences agricultural TFP.

Keywords: Rural financial development; Agricultural mechanization; Agricultural total factor productivity (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:79:y:2025:i:c:s1544612325005513

DOI: 10.1016/j.frl.2025.107288

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