A Study on the Effectiveness of Financial Supports to the Entrepreneurship of Farmers

We use a fixed effect variable coefficient model to analyse effectiveness of financial supports to the entrepreneurship of farmers, based on the data from 1978 to 2011 in China. Results show that due to the significant differences in regions among farmers ’ entrepreneurship, the demand of rural fi-nancial supports for the peasants ’ entrepreneurship is distinct; the different rural financial sup-ports for farmers ’ entrepreneurial also exist. The financial supports of developed eastern prov-inces to the entrepreneurship of farmers are effective, while that of the underdeveloped provinces in middle and western China is opposite. At last, focusing on market failure that farmers in poor areas encountered, like the rural imperfect financial system, the credit guarantee system, the asymmetric information and high transaction cost, some suggestions are given in this paper, such as the encouragement of the micro-finance for farmers ’ entrepreneurship, standardizing and guiding the informal finance for farmers ’ entrepreneurship and the establishment of risk fund fo