A spatial econometric study on effects of fiscal and financial supports for agriculture in China

Abstract

Since the reform and opening-up, the disparity between Chinese rural economy and the overall national economic development has already become the key constraint for further development of the national economy. In order to increase the farmers' income and to promote rural economic development, the efforts of China's budgetary and financial policies to support agriculture have been strengthened year by year. However, it lacks an accurate and effective assessment to evaluate the effects of China's fiscal and financial policies supports for agriculture. This paper proposes to estimate and measure the effects of China's fiscal and financial supports for agriculture utilizing the Chinese provincial panel data on the basis of the latest spatial panel econometric method. The results show that since China intensified the fiscal and financial support in 2004, the direct effects of fiscal and financial supports for agriculture have improved, but the spatial spillover effects have turned from positive to negative.