Factors Influencing the Coupling of the Development of Rural Urbanization and Rural Finance: Evidence from Rural China

Abstract

This study empirically analyzes factors influencing the coupling and coordinated development of rural urbanization and rural finance. For this purpose, the study employs the coupling degree model and develops a panel quantile model to estimate the coupling degree and coupling coordination degree of rural urbanization and rural finance. Accordingly, the study presents panel data comprising 31 provinces, municipalities, and autonomous regions in China from 2010 to 2019. The empirical results reveal that the coupling degree of rural urbanization and rural finance is relatively low in most study areas. This result suggests that rural urbanization and rural financial development in most provinces in China have not exhibited coordinated development. Further, the results reveal that urban population density negatively affects the coupling and coordination degree of rural urbanization and rural finance. Moreover, the effects of urban population density are more significant in areas with a low coupling coordination degree compared with those with a higher coupling coordination degree. An increase in the quantile gradually decreases the effect of the proportion of educational expenditure to GDP on the degree of rural urbanization and rural financial coupling coordination. However, the effect of financial development efficiency increases accordingly. The per capita GDP, per capita fiscal expenditure, and per capita built-up area significantly affect all the quantiles, indicating a positive correlation. This correlation can promote the coupling and coordinated development of rural urbanization and rural finance. In areas with a low coupling coordination degree, the financial development scale significantly positively affects the coupling coordination degree of rural urbanization and rural finance. In areas with a high coupling coordination degree, the financial development scale significantly negatively correlates with the coupling coordination degree. In addition, a positive correlation exists between the financial development structure and the coupling coordination degree of rural urbanization and rural finance.