Factors impacting consumer confidence: Evidence from China

Shaoyi Lu and Taoufik Bouraoui ()
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Shaoyi Lu: ESC [Rennes] - ESC Rennes School of Business
Taoufik Bouraoui: ESC [Rennes] - ESC Rennes School of Business

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Abstract: This article aims to investigate the factors that may impact the Chinese consumer confidence. Three variables are selected: interest rate, exchange rate Chinese Yuan against US dollars (CNY/USD) and government expenditure. We apply Vector Error Correction Model (VECM) over the period spanning from 2008M01 to 2023M03. While in the short-run the findings report that interest rate, exchange rate (CNY/USD) and government expenditure do not notably influence the consumer confidence; in the longrun, we found a significant and positive relationship between government expenditure and China's consumer confidence index. More government expenditure indicates the country is boosting the whole economy and providing more resources to the people, which affect positively the consumer confidence. Policymakers in China can invest further in this measure to gain the confidence of their people.

Keywords: Consumer confidence; economic activity; China; Vector Error Correction Model (search for similar items in EconPapers)
Date: 2024-11-30
New Economics Papers: this item is included in nep-cna
Note: View the original document on HAL open archive server: https://hal.science/hal-04818095v1
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Published in Advances in Consumer Research, 2024, 1 (1)

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04818095

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