The interaction mechanisms between farmers’ financial literacy and the development of rural factor market
【Abstract】The enhancement of farmers’ financial literacy would encourage farmers’ participation in the factor market and promote the cultivation of rural factor market. Based on this theoretical logic, this paper conducted a systematic summary of theoretical research on financial literacy. The study interpreted the internal association mechanisms between farmers’ financial literacy and the development of rural factor market, explored and constructed the interaction system between farmers’ financial literacy and the integration of rural three major factor markets, namely, the labor, land and capital markets from a dynamic perspective, and analyzed the local and overall operation logic of this system. This study found that improving the level of farmers’ financial literacy could help them to participate in the rural factor market as both factors demanders and suppliers, and promote the full flow of labor, land, capital and other elements and the development of a single factor market. Further research showed that taking farmers’ financial literacy as the linkage could effectively activate the interaction system of rural factor market. This was beneficial to the continuous improvement of farmers’ financial literacy in the practice of factor flow and the constant generation of new cycles of factor flow at the same time. As a result, the equilibrium development and effective integration of rural factor markets would eventually be realized.
【Keywords】 farmers’ financial literacy; rural factor market; interaction mechanism;
. ① Data source: http://epaper.oeeee.com/epaper/A/html/2018-05/07/content_25384.htm#article [^Back]
. ① Data source: Developing various forms of moderate scale management to improve agricultural quality, efficiency and competitiveness. http://szb.farmer.com.cn/nmrb/html/2018-02/05/nw.D110000nmrb_20180205_3-06.htm?div= 1. [^Back]
. ② Data source: http://epaper.zqrb.cn/html/2018-03/20/content_262681.htm [^Back]
. ① Data source: Financial Consumer Protection Bureau of The People’s Bank of China, Analysis Report of Consumer’ Financial Literacy Survey 2015 (消费者金融素养调查分析报告2015) (2016), http://shanghai.pbc.gov.cn/fzhshanghai/113598/3053178 /index. html [^Back]
. ① Data source: http://data.163.com/15/1206/22/BA6E0K0R00014MTN.html [^Back]
. ① The scope of farmers’ entrepreneurship is defined as follows. (1) Agriculture-related entrepreneurship refers to the implementation of scale operation, the development of new businesses and the establishment of new organizations and other agriculture-related economic activities in traditional agricultural fields such as planting, breeding, forestry and fishery. (2) Non-agricultural entrepreneurship refers to non-agricultural economic activities such as carrying out commercial circulation, engaging in services in the tertiary industry and establishing enterprises in the field of industry and commerce. [^Back]
. ② Short-term employment reflects the employment relationship without stability, such as temporary workers, short-term workers, and so on, of which payment is mostly calculated on a daily basis, while long-term employment manifests a relatively stable relation of employment, which is mostly reflected in the annual employment, with the labor compensation accounted monthly. [^Back]
. ③ The questions measuring financial literacy include the following. (1) After inflation, how does the products that you can buy with a CNY 100 change in comparison to what you can buy with it now? The options include “I do not know,” “I can buy more,” “I can buy the same,” and “I can buy less.” ② It is supposed that you deposit CNY 100 in a fixed deposit for three years and do not withdraw it during the period of time. If the annual interest rate of the three-year fixed deposit is 3%, how much money can you withdraw at maturity after three years? The options include “I cannot account it,” “CNY 103,” “CNY 106,” and “CNY 109.” ③ If someone borrows a loan of CNY 300,000 from a bank, with the monthly repayment amount of the 10-year loan term higher than that of the 20-year loan term, which of them has a lower total interest expense? The options include “I do not know,” “20-year loan,” and “10-year loan.” [^Back]
. ④ Do you agree or disagree with the following statement? If someone has a bad credit record in bank A, it will adversely affect his/her application for a loan in bank B. The options include “I do not know,” “I disagree,” and “I agree.” [^Back]
. ⑤ Do you agree that the risk of buying an open-end equity fund is lower than the risk of buying a single stock? The options include “I do not know,” “I disagree,” and “I agree.” [^Back]
1 Chen, F. & Zhai, W. Economic Research Journal (经济研究), (10) (2015).
2 Hou, M. Jinan Journal (Philosophy & Social Science Edition) (暨南学报(哲学社会科学版)), (10) (2013).
3 Hu, Z. & Zang, R. Journal of Central University of Finance & Economics (中央财经大学学报), (2) (2017).
4 Hu, X., Hong, W., Wang, M. et al. Chinese Journal of Population, Resources and Environment (中国人口·资源与环境), (11) (2017).
5 He, J., Tian, Y., Liu, T. et al. Finance & Trade Economics (财贸经济), (11) (2017).
6 Ji, X., Qian, Z. & Ge, Y. Jianghai Academic Journal (江海学刊), (2) (2015).
7 Luo, B. & Zheng, Y. Academic Research (学术研究), (7) (2012).
8 Liu, X., Chen, L. & Yang, Q. Management World (管理世界), (3) (2014).
9 Liu, Y. & Qian, W. Economic Survey (经济经纬), (2) (2018).
10 Mi, Y., Zeng, Z. & Gao, Y. Issues in Agricultural Economy (农业经济问题), (5) (2017).
11 Qin, F., Wang, W. & He, J. Journal of Financial Research (金融研究), (10) (2016).
12 Song, Q., Wu, Y. & Yin, Z. Journal of Financial Research (金融研究), (6) (2017).
13 Sun, G., Li, Q. & Li, C. China Rural Survey (中国农村观察), (4) (2017).
14 Su, L., He, X. & Kong, R. Chinese Rural Economy (中国农村经济), (11) (2017).
15 Wu, Y., Peng, C. & Yin, Z. Modern Economic Science (当代经济科学), (4) (2016).
16 Wu, Y., Song, Q. & Yin, Z. Chinese Rural Economy (中国农村经济), (5) (2016).
17 Wang, Z., Deng, Y. & Liao, L. Journal of Financial Research (金融研究), (12) (2016).
18 Wang, Y. & Fan, J. Financial Theory & Practice (金融理论与实践), (3) (2015).
19 Wei, Z. & Song, Q. Finance & Economics (财经科学), (7) (2016).
20 Xu, H. Contemporary Economic Management (当代经济管理),(9) (2011).
21 Xu, H. & Jin, J. Resources Science (资源科学), (8) (2011).
22 Xu, Q., Zhang, L. & Wu, B. Journal of South China Agricultural University (Social Science Edition) (华南农业大学学报(社会科学版)), (4) (2016).
23 Yin, Z., Song, Q. & Wu, Y. Economic Research Journal (经济研究), (4) (2014).
24 Yin, Z., Song, Q., Wu, Y. et al. Management World (管理世界), (1) (2015).
25 Zhang, H. & Xiong, X. China Rural Survey (中国农村观察), (3) (2017).
26 Zeng, Z., He, Q., Wu, Y. et al. The Economist (经济学家), (6) (2015).
27 Zhu, W. & Luo, B. Academic Research (学术研究). (8) (2016).
28. Zhang, H. & Yin, Z. Journal of Financial Research (金融研究), (7) (2016).
29 Zhang, L., Wang, M. & Liu, J. Chinese Rural Economy (中国农村经济), (12) (2015).
30 Anderson, A., F. Baker, and D. T. Robinson, 2017, “Precautionary Savings, Retirement Planning and Misperceptions of Financial Literacy”, Journal of Financial Economics, 126 (2): 383–398.
31 Agarwal, S., G. Amromin, I. Ben-David, S. Chomsisengphet, and D. D. Evanoff, 2015, “Financial Literacy and Financial Planning: Evidence from India”, Journal of Housing Economics, 27: 4–21.
32 Chen, H., and R. P. Volpe, 1998, “An Analysis of Personal Financial Literacy among College Students”, Financial Services Review, 7 (2): 107–128.
33 Cutler, N. E., and S. J. Devlin, 1996, “Financial Literacy 2000”, Journal of the American Society of CLU&CHFC, 50 (4): 32–37.
34 Davidson, S., 2002, “Take the Long Outlook on Credit Quality and Financial Literacy”, Community Banker, 11 (5): 40–42.
35 Dohmen, T., A. Falk, D. Huffman, and U. Sunde, 2010, “Are Risk Aversion and Impatience Related to Cognitive Ability?”, American Economic Review, 100 (3): 1238–1260.
36 Gathergood, J., 2012, “Self-control, Financial Literacy and Consumer Over-indebtedness”, Journal of Economic Psychology, 33 (3): 590–602.
37 Hastings, J. S., and O. S. Mitchell, 2011, “How Financial Literacy and Impatience Shape Retirement Wealth and Investment Behaviors”, National Bureau of Economic ResearchWorking PaperNo.16740, http://www.nber.org/papers/w16740.
38 Huston, S.J., 2010, “Measuring Financial Literacy”, Journal of Consumer Affairs, 44 (2): 296–316.
39 Lusardi, A., O. S. Mitchell, and V. Curto, 2010, “Financial Literacy among the Young: Evidence and Implications for Consumer Policy”, Journal of Consumer Affairs, 44 (2): 358–380.
40 Mason, C. L. J., and R. Wilson, 2000, “Conceptualizing Financial Literacy”, Loughborough University Occasional Paper.
41 Noctor, M., S. Stoney, and R. Stradling, 1992, “Financial Literacy”. Report Prepared for the National Westminster Bank, National Foundation for Education Research, London.
42 Sevim, N., F. Temizel, and S. Özlem, 2012, “The Effects of Financial Literacy on the Borrowing Behaviour of Turkish Financial Consumers”, International Journal of Consumer Studies, 36 (5): 573–579.
43 Servon, L. J., and R. Kaestner, 2008, “Consumer Financial Literacy and the Impact of Online Banking on the Financial Behavior of Lower-income Bank Customers”, Journal of Consumer Affairs, 42 (2): 271–305.
44 Walstad, W. B., K. Rebeck, and R. A. Mac Donald, 2010, “The Effects of Financial Education on the Financial Knowledge of High School Students”, Journal of Consumer Affairs, 44 (2): 336–357.