Formal Credit Rationing and Productivity in Chinese Agriculture

This paper investigates the relationship of credit rationing and productivity in Chinese agriculture under the household survey on credit situation. A Probit model is used to decide factors which significantly influence the farmer confront credit rationing, then the relationship of credit rationing and productivity is detected with switch regression model. Empirical results show that there are 45% individual households who under credit rationing. Except the quantity rationing, 18.1% and 7% households suffer transaction cost rationing and risk rationing. The research suggests that the productivity is depended on the credit rationing in china.