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Abstract

Both the escape from the predicament of traditional financial support in rural areas and the cultivation of new types of agricultural management entities underlie, at a micro level, the improvement of a new-type of agricultural management system, and offer an important guarantee for the implementation of a rural revitalization strategy. In reference to the demands of carrying out reform, activating factors, invigorating entities and stimulating markets during the implementation of this rural revitalization strategy, we are applying a financing preference theory that infers and analyzes the excessive preference for new-type agricultural management entities (family farms, specialized farmer cooperatives, specialized large family farms, and modern agricultural enterprises) regarding government subsidies (quasi-equity financing). Our analysis has identified crucial factors in the issue and predicts that government subsidies (quasi-equity financing) will crowd out financial support funding (quasi-debt financing), and we offer empirical proof obtained through statistical modeling. As our results indicate, financing costs, free cash flows, and the perceived income adequacy (PIA) of new-type agricultural management entities all have significant influence upon decision-making for debt financing by such entities. Therefore, with the concrete contents of the formulation of policies concerning the financial support for rural agricultural strategy, one not only needs to consider the further decrease of financing costs, but also should take into account both the designing of cash flow mechanism in the process of paying both principal and interest, and the improvement of bankruptcy rules for agricultural management entities to accelerate the transformation of family farms, specialized farmer cooperatives, and specialized large family farms, towards modern agricultural enterprises. Meanwhile, upgrades to the supply chains of the agriculture industry, improvements to the construction of the rural financial information system, building an accounting system that meets the requirements of the rural revitalization strategy, and giving full play to the policies for financial support, which assume an important role in activating factors and markets during the implementation of the rural revitalization strategy, are also anticipated

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