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Does Formal Credit Constraint Restrain Agricultural Production?

J. Wang, S. Bi, K. Lyu and C. Zhang

No 277536, 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia from International Association of Agricultural Economists

Abstract: This study adopts econometric models to link the formal credit constraints with agricultural output and short-term investment in rural China. The empirical results show that formal credit constraint does impinge significantly on agricultural production, and credit-constrained farmers mostly depend on family endowment. In case where the formal credit demand is fully met, the average output per mu will increase by 14.6%. According to further analysis, formal credit constraints have a differential impact on short-term agricultural inputs. Demand-side credit constraint restrains the purchase to agricultural machinery service, while supply-side credit constraint has negative effects on fertilizer inputs, but not on seed, pesticide inputs and labor hiring. Acknowledgement : The paper was supported by the Programs of National Natural Science Found of China (NSFC) (71573262), China Agriculture Research System (CARS-02), as well as the Agricultural Science and Technology Innovation Program (ASTIP-IAED-2018-03).

Keywords: Agricultural; Finance (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-cna and nep-tra
Date: 2018-07
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