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How County-Level Agricultural Loans and Fiscal Expenditure Impact Rural Residents¡¯ Income in China¡ª¡ªAn Empirical Study of the Hierarchical Effect by Quantile Regression

Author

Listed:
  • Xiaohua Wang

    (College of Economics and Management & Postdoctoral Station of Statistics, Southwest University, Chongqing 400715, China)

  • Li Liu

    (Center for Research in Management, The University of Toulouse 1, Capitole, Toulouse 31042, France)

Abstract

Using cross-sectional data from 853 counties in 11 western China provinces, we employ quantile regression (QR) and instrumental variable quantile regression (IVQR) to investigate the hierarchical effect of fiscal expenditure and agricultural loan on rural residents¡¯ income. We find: (1) the relationship between agricultural loan and income is consistent with the inverted U-shape (Kuznets curve); (2) the coefficient of quantile regression for rural residents¡¯ loan gradually decreases; particularly, the impact on the high-income group is insignificant (at 0.90 quantile); (3) for 0.10 and 0.50 quantile, the increase of fiscal expenditure would hinder rather than promote income growth; (4) the restraining effect becomes more pronounced for the lower groups; in contrast, there is a significant positive relationship between income and fiscal expenditure for 0.90 quantile¡¯s income group. Implications for government policy formulation are propounded accordingly.

Suggested Citation

  • Xiaohua Wang & Li Liu, 2016. "How County-Level Agricultural Loans and Fiscal Expenditure Impact Rural Residents¡¯ Income in China¡ª¡ªAn Empirical Study of the Hierarchical Effect by Quantile Regression," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 11(2), pages 302-320, June.
    • Handle: RePEc:fec:journl:v:11:y:2016:i:2:p:302-320
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    File URL: http://journal.hep.com.cn/fec/EN/10.3868/s060-005-016-0017-4
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    Cited by:

    1. Quan Sun & Lexin Zhao, 2023. "The Impact of Rural Enterprise Park Policy on the Income of Rural Residents: Evidence from China," Sustainability, MDPI, vol. 15(11), pages 1-15, June.

    More about this item

    Keywords

    fiscal expenditure; agricultural loan; loan for rural residents; rural residents¡¯ income; quantile regression;
    All these keywords.

    JEL classification:

    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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