Interaction between rural financial development and rural economic growth

This study combines the financial constraint theory, financial deepening theory, economic growth model, and financial and economic interaction theory to construct an interaction model. Obtaining the relevant data of rural finance and rural economy in S province, we systematically analyze the growth history of farmers’ income, the growth rate and the change trend of rural finance. Then Granger causality test and impulse response function analysis are used to empirically analyze the interaction between rural finance and rural economy. The results show that the development of rural finance and rural economy are correlated, and the growth trend all conforms to three stages: 1991-2004 high growth period, 2005-2015 slowdown period, 2015-2023 rapid linear growth period. Interaction between rural financial scale, efficiency and structure and rural economic growth. Rural financial scale and efficiency are positively correlated with rural economic growth, with the largest positive contribution in period 7. While rural financial structure inhibits rural economic growth.