Inclusive finance, agricultural TFP changes, and the urban-rural income gap: from the perspective of structural issues of inclusive finance

ZOU Ke1,2

(1.Key Lab of Science & Technology in Finance, Guangdong University of Finance, Guangzhou 510521, China 510521)
(2.Guangdong Provincial Key Laboratory of Technology and Finance & Big Data Analysis, Guangzhou 510521, China 510521)

【Abstract】This study uses provincial panel data to empirically analyze the effects of inclusive finance and agricultural total factor productivity (TFP) on the urban-rural income gap, based on mediating effect and interaction effect models. The results show that inclusive finance, as the main factor, can reduce the urban-rural income gap significantly, in both a direct manner and an indirect manner. Agricultural TFP contributes more than 40% of the mediating effect. However, existing inclusive financial resources are excessively inclined toward small enterprises, the salariat, and wealthy farmers. This mitigates the role of such finance in narrowing the urban-rural income gap and exacerbates the internal income gap between low-income groups. Therefore, the structural issues in the development of inclusive finance require a development-oriented approach in “blood-creation” mode. This will have significant policy implications for improving the structural issues in the development of inclusive finance and narrowing the urban-rural income gap through development-oriented inclusive finance.

【Keywords】 inclusive finance; agricultural TFP; urban-rural income gap; structural issues ;


【Funds】 National Social Science Fund of China (18BTJ008)

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This Article


CN: 44-1696/F

Vol 34, No. 02, Pages 41-53

March 2019


Article Outline


  • 1 Introduction
  • 2 Literature review and theoretical analysis
  • 3 Measuring agricultural TFP and inclusive finance, and constructing the model
  • 4 Data source and descriptive statistical analysis
  • 5 Empirical analysis
  • 6 Analysis on improving the structural issues of inclusive finance from a development perspective
  • 7 Conclusions and implications
  • References