Mobile payment adoption and the decline in China’s household savings rate

Jianmei Zhao () and Lele Zhao ()
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Jianmei Zhao: Central University of Finance and Economics
Lele Zhao: Central University of Finance and Economics

Empirical Economics, 2022, vol. 63, issue 5, No 6, 2513-2537

Abstract: Abstract This paper examines the effects of mobile payment (m-payment) adoption on household savings decline in China. Using data from the 2017 China Household Finance Survey, we employ an instrumental variable approach with multiple robustness checks to evaluate the impact of m-payment adoption on household savings rate. Our study discovers that m-payment usage decreases the household savings rate by about 20% points. We also find that, relative to that of rural and older households, the savings of urban and younger households are more significantly influenced by m-payment adoption. The main channels through which m-payment usage affects the household saving rate likely include improved risk sharing, alleviated credit constraint, and enhanced risk tolerance. This paper provides important insights about m-payment adoption and the ongoing household savings decline in China.

Keywords: Mobile payment (M-payment); Household savings; Risk-sharing; Credit constraint; Risk tolerance; China (search for similar items in EconPapers)
JEL-codes: D10 D14 O16 O33 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s00181-022-02212-w

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