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Social capital, finance, and consumption: Evidence from a representative sample of Chinese households

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  • Cull, Robert
  • Gan, Li
  • Gao, Nan
  • Xu, Lixin Colin
Abstract
Using a sample of Chinese households, we study how a type of social capital, private social networks, affects access to credit and its implications for consumption. We find a strong and likely causal link between private social networks, use of informal credit, and household consumption. Informal credit via private social networks facilitates household consumption especially for households that experienced a recent health shock, that face financial constraints, and that do not have access to formal finance, and the effects are more pronounced in poor regions and rural areas.

Suggested Citation

  • Cull, Robert & Gan, Li & Gao, Nan & Xu, Lixin Colin, 2022. "Social capital, finance, and consumption: Evidence from a representative sample of Chinese households," Journal of Banking & Finance, Elsevier, vol. 145(C).
    • Handle: RePEc:eee:jbfina:v:145:y:2022:i:c:s0378426622002175
    DOI: 10.1016/j.jbankfin.2022.106637
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    Cited by:

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    2. Balana, Bedru & Oyeyemi, Motunrayo, 2021. "Credit Constraints and Adoption of Agricultural Technologies in Developing Countries? Evidence from Nigeria," 2021 Conference, August 17-31, 2021, Virtual 315347, International Association of Agricultural Economists.
    3. Lei, Jie & Bai, Yiyi & Kong, Dongmin, 2024. "Bank competition and household informal credit," International Review of Financial Analysis, Elsevier, vol. 94(C).

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    More about this item

    Keywords

    Informal finance; Social capital; Consumption;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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