Financial development and population growth: Evidence from bank concentration in China

Yihui Chen, Dongxu Li and Ting Li

Pacific-Basin Finance Journal, 2024, vol. 85, issue C

Abstract: Using 288 cities in China from 2000 to 2018, we show that a one-standard-deviation increase in bank concentration is associated with 7.9% lower population growth relative to the mean. This effect holds robust after controlling for city characteristics. Cities with higher bank concentration have less entrepreneurship and labor income. We use China's 2009 bank deregulation as a quasi-natural experiment, and find that the shock leads to significant increases in population growth for cities with new entry of joint-stock banks and city commercial banks. We argue the deregulation increases credit supply, which relieves local households' financial constraints and improves population growth.

Keywords: Bank concentration; Population growth; Household finance; China (search for similar items in EconPapers)
JEL-codes: G21 Q56 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:85:y:2024:i:c:s0927538x24001227

DOI: 10.1016/j.pacfin.2024.102371

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