The Impact of Financial Market Development on Agricultural Factor Misallocation: Household-Level Evidence from China

Table 6

Results on the impact of financial market development on agricultural factor distortion.

Variables
	East	Middle	West	East	Middle	West	East	Middle	West	East	Middle	West
	−0.000301	−0.000396	0.00195	0.00875	0.0146	0.00770	0.000318	0.00419	−0.00151	0.0103	0.00396	0.00778
	(0.000913)	(0.00101)	(0.00133)	(0.00196)	(0.00173)	(0.00188)	(0.00123)	(0.00139)	(0.00160)	(0.000862)	(0.000770)	(0.00110)
(breadth of fin.dev)	−0.00192	−0.00190	0.00247	−0.0165	−0.0203	−0.0191	−0.00531	0.00226	−0.0145	−0.0130	−0.00309	−0.00287
	(0.00158)	(0.00118)	(0.00142)	(0.00302)	(0.00226)	(0.00217)	(0.00236)	(0.00170)	(0.00192)	(0.00137)	(0.000902)	(0.00120)
(Depth of fin.dev)	−6.05e − 07	−3.88e − 07	−3.52e − 06	−7.79e − 07	−1.27e − 06	2.78e − 06	−2.83e − 07	−5.00e − 07	4.26e − 06	−8.66e − 07	−7.84e − 07	−2.70e − 06
	(6.62e − 07)	(6.60e − 07)	(8.98e − 07)	(1.26e − 06)	(1.22e − 06)	(1.97e − 06)	(1.09e − 06)	(8.17e − 07)	(1.84e − 06)	(5.97e − 07)	(5.41e − 07)	(8.02e − 07)
Household size	−0.0179	0.000128	−0.00664	0.0616	0.0375	−0.0136	−0.136	−0.0884	−0.0587	−0.00518	−0.000709	0.00247
	(0.0268)	(0.0203)	(0.0259)	(0.0416)	(0.0328)	(0.0336)	(0.0340)	(0.0268)	(0.0319)	(0.0245)	(0.0158)	(0.0216)
Government subsidy	−0.180	−0.275	−0.435	−0.185	−0.452	0.138	0.0877	−0.595	0.444	−0.342	−0.431	−0.425
	(0.0430)	(0.0354)	(0.0424)	(0.0768)	(0.0641)	(0.0631)	(0.0534)	(0.0487)	(0.0534)	(0.0396)	(0.0277)	(0.0361)
Age of household head	−0.00497	−0.00639	−0.00643	0.0200	0.0157	0.00358	0.00706	−0.0199	0.00435	0.00423	−0.00843	−0.00416
	(0.00426)	(0.00369)	(0.00374)	(0.00782)	(0.00671)	(0.00501)	(0.00546)	(0.00510)	(0.00425)	(0.00410)	(0.00285)	(0.00312)
Gender of household head	0.302	0.148	0.316	0.115	−0.0155	−0.0614	0.114	0.318	−0.253	0.297	0.190	0.264
	(0.0492)	(0.0511)	(0.0633)	(0.0905)	(0.0947)	(0.0949)	(0.0683)	(0.0678)	(0.0859)	(0.0462)	(0.0393)	(0.0525)
Education of household head	−0.0177	−0.00717	−0.0331	0.0181	0.0248	0.0249	−0.0102	−0.0134	0.0311	0.00517	−0.00732	−0.0166
	(0.00970)	(0.00854)	(0.00975)	(0.0164)	(0.0156)	(0.0146)	(0.0124)	(0.0117)	(0.0127)	(0.00908)	(0.00662)	(0.00816)
Physical condition of household head	0.0489	−0.0169	0.0856	0.264	0.133	0.142	0.146	0.0177	0.119	0.0972	0.00739	0.0807
	(0.0585)	(0.0495)	(0.0635)	(0.116)	(0.0915)	(0.0942)	(0.0745)	(0.0701)	(0.0803)	(0.0540)	(0.0392)	(0.0538)
Constant	4.400	4.551	4.378	0.740	1.075	2.667	5.221	7.078	5.137	2.499	3.057	2.969
	(0.266)	(0.220)	(0.250)	(0.484)	(0.392)	(0.321)	(0.352)	(0.314)	(0.294)	(0.254)	(0.171)	(0.211)
Household-year observation	3,023	3,263	3,294	3,023	3,263	3,294	3,023	3,263	3,294	3,023	3,263	3,294
Numbers of unique households	1,462	1,441	1,510	1,462	1,441	1,510	1,462	1,441	1,510	1,462	1,441	1,510
Adjusted R^2	0.045	0.053	0.096	0.065	0.146	0.063	0.025	0.150	0.091	0.228	0.211	0.134

Notes： is the degree of distortion for factor d (d can be either capital, land, and labor or distortion index (DI)), farmer i, and year t. stands for nonagricultural employment opportunities in village and year t, which is the proportion of nonagricultural employment labor force. is a proxy for the breadth of rural financial market development in village and year t, which is calculated as the proportion of farmers who receive loans from the local village. is a proxy for the depth of rural financial market development in village and year t, which is calculated as the financial liabilities of nonresidential loans of farmers (RMB). The control variables include the following: Government subsidy is an indicator variable, which equals one if a household receives government subsidy and zero otherwise. Gender of household head is an indicator variable, which equals one if the household head is male and zero if the household head is female. Education of household head is the number of years of education he/she has. Physical condition of household head is an indicator of whether the household head is healthy (one) or not (zero). ,, and represent statistical significance at 1, 5, and 10 percent levels, respectively. The numbers in parentheses are standard errors.