Rural Financial Development Impacts on Agricultural Technology Innovation: Evidence from China

TLDR

Agricultural technology innovation is essential for enhancing productivity, sustainability, and resilience in food production, thereby supporting public health. The study investigates how rural financial development—both its scale and efficiency—affects agricultural technology innovation across Chinese provinces, and how these effects vary by levels of marketization and economic development. Using panel data from 31 Chinese provinces between 2003 and 2015, the authors analyze the relationship between rural financial development and agricultural technology innovation. Results show that rural finance positively drives agricultural technology innovation, with efficiency boosting innovation in low‑marketization regions and scale boosting it in high‑marketization regions, and that higher innovation levels in turn support rural economic development.

Abstract

Agricultural technology innovation is key for improving productivity, sustainability, and resilience in food production and agriculture to contribute to public health. Using panel data of 31 provinces in China from 2003 to 2015, this study examines the impact of rural financial development on agricultural technology innovation from the perspective of rural financial scale and rural finance efficiency. Furthermore, it examines how the effects of rural financial development vary in regions with different levels of marketization and economic development. The empirical results show that the development of rural finance has a significant and positive effect on the level of agricultural technology innovation. Rural finance efficiency has a significantly positive effect on innovation in regions with a low degree of marketization, while the rural financial scale has a significantly positive effect on technological innovation in regions with a high degree of marketization. Further analysis showed that improving the level of agricultural technology innovation is conducive to rural economic development. This study provides new insights into the effects of rural financial development on sustainable agricultural development from the perspective of agricultural technology innovation.