Work

Does the commercialization reform of rural credit cooperatives promote the growth of family farms?

Year: 2025

Type: article

Abstract: : This paper, based on the data of Chinese family farms from 2013 to 2021, uses the transformation of rural credit cooperatives (RCCs) into rural commercial banks (RCBs) as a quasi-natural experiment and employs a multi-period gradual Difference-in-Differences (DID) model to empirically test the impact of the commercialization reform of RCCs on the growth of family farms and its mechanisms. The study finds that: (1) the commercialization reform of RCCs significantly promotes the growth of family farms; (2) in terms of mechanisms, the commercialization reform of RCCs can promote the growth of family farms through two mechanisms: alleviating financing constraints and reducing leverage levels; (3) further heterogeneity analysis on individual characteristics of family farms and their regions shows that the promotional effect of the commercialization reform of RCCs on the growth of larger-scale, better-managed family farms, as well as those located in the eastern and western regions, areas with lower levels of digital financial development, and higher levels of innovation and entrepreneurship, is more pronounced. This paper provides theoretical support for the continued advancement of the commercialization reform of RCCs and also offers some policy references for the future reform direction of local rural financial institutions.

Source: International Review of Economics & Finance

DOI: 10.1016/j.iref.2025.104271

Authors: Zhongwen Chen, Zeyu Ding, Cheng-To Lin

Institutions: Hengyang Normal University, Renmin University of China

Language: English

Topic: Agricultural economics and policies

Subfield: Safety Research

Field: Social Sciences

Domain: Social Sciences

SDGs: Zero hunger, Decent work and economic growth

Open Access status: gold

Estimated APC paid: $1,930