The affecting channels and performances of financial development and poverty reduction: New evidence from China's fishery industry

Fisheries are one of the most important sources of income for millions of people around the world. This paper examines the impact of financial development on fishermen's poverty reduction in China between 1996 and 2017. The state space model and the comprehensive mediation effect test method are employed to verify the affecting channels, while the threshold panel model is introduced to illustrate the specific performance in this process. Results have confirmed the existence of the indirect effect between financial development, economic growth and fishermen's poverty reduction. This means the influence of financial development on fishermen's poverty reduction in China mainly relies on the intermediary role of economic growth. Furthermore, the empirical evidence also supports an asymmetric inverted U-shaped relationship, which is linked to the Greenwood-Jovanovic (GJ) hypothesis. The findings recommend that policies geared toward generalized expansion of financial resources coverage of fisheries should be adopted to implement differentiated countermeasures according to the distribution of threshold effect and inclusive financial products to help overcome financing difficulties in fisheries.

Automated summary

The study found that the impact of financial development on poverty reduction among fishermen in China relies mainly on the intermediary role of economic growth, while also supporting the existence of an asymmetric inverted U-shaped relationship. Therefore, it is recommended to implement policies focusing on financial resources coverage in fisheries and inclusive financial products to address financing difficulties.