Abstract:By constructing a theoretical framework of two-period dynamic investment,this paper theoretically analyzes the influence of credit demand restraint and non-farm income on farmers’ adoption of environment-friendly agricultural technology,and further conducts an empirical test by using IV-Heckit,CMP and Fisher Permutation test models based on data on 957 farmers in Heilongjiang,Zhejiang,Henan and Sichuan provinces. The number of financial projects taken by other family members is used as an instrumental variable. The research shows that the credit demand restraint is prevalent in rural China. To be specific,it has a significant negative impact on farmers’ adoption of environmentally friendly agricultural technology. The non-farm income has an obvious mitigating effect on farmers’ adoption of environmentally friendly agricultural technology. To be specific,its impact is remarkable on the application of organic fertilizer which is featured by large funds and high popularity yet limited on returning straw to fields which requires little on funds. Therefore,some policy suggestions are proposed,including channel construction,promoting rural green financial service and financial innovation.