Does the Inclusive Financial Policy Innovation Promote Rural Revitalization—A Synthetic Control Test of a National Pilot Zone for Inclusive Financial Reform

Abstract

The establishment of a pilot zone for inclusive financial reform is a major policy innovation in the modern financial system in China and has a lasting and far-reaching significance in accelerating the realization of the overall revitalization of rural areas. This paper takes the first pilot zone for inclusive financial reform (Henan Province) approved by the State Council in 2016 as a quasi natural experiment and uses the synthetic control method based on the “counterfactual” perspective and the intermediary effect model to empirically evaluate the net effect and impact mechanism of inclusive finance pilot policies on the improvement of the comprehensive level of rural revitalization. The results show that the establishment of the pilot zone for inclusive financial reform in Henan Province has significantly improved the comprehensive level of local rural revitalization, and this promotion effect has a trend of continuous acceleration after a one-year lag. In addition, the conclusion still holds after a series of robustness tests. The pilot policy of inclusive finance can positively contribute to rural revitalization development from both the supply and demand sides by enhancing the supply of rural credit and increasing the depth and density of agricultural insurance. Furthermore, the supply and demand sides have a synergistic effect in promoting rural revitalization development, although the effect is not significant at present. The above results not only improve the study of the impact of the pilot policy of inclusive finance on rural revitalization but also provide a strong reference for the formulation and implementation of rural financial reform policies. At the same time, the paper puts forward specific policy suggestions in terms of scientific promotion of the pilot zone, ensuring the supply and demand balance of “credit + insurance” and innovating the system and mechanism of the pilot zone.