The analysis of multidimensional poverty reduction effects of dual financial participation: evidence from rural household in China

Qianling Wang, Zhigang Chen () and Li Gui
Additional contact information
Qianling Wang: Wuhan University
Zhigang Chen: Wuhan University
Li Gui: Hubei University of Economics and Management

Palgrave Communications, 2025, vol. 12, issue 1, 1-19

Abstract: Abstract This study examines the impact of formal and informal financial participation on the multidimensional poverty status of rural households in China. Using panel data from the China Family Panel Studies (CFPS) covering the period 2014–2020, we construct a multidimensional poverty index based on the Alkire–Foster method and conduct empirical analyses employing panel Logit and dynamic Probit models. The results indicate that dual financial participation significantly reduces the likelihood of multidimensional poverty, a finding that remains robust after accounting for poverty state dependence and addressing endogeneity concerns. Further analysis reveals that formal financial participation primarily alleviates poverty in the dimensions of assets, risk resilience, and education, whereas informal financial participation is more strongly associated with improvements in living standards. The poverty reduction effects also exhibit substantial heterogeneity across households with different income levels, household head characteristics, and family structures. In addition, macro-institutional factors play a moderating role: higher agricultural insurance penetration and greater maturity of social credit systems enhance the poverty reduction effects of formal finance, while excessive financial regulation may undermine the effectiveness of informal finance. Overall, the findings provide comprehensive empirical evidence on the complementary roles of formal and informal financial systems in supporting rural poverty alleviation efforts in China.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/s41599-025-05095-1 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-05095-1

Ordering information: This journal article can be ordered from
https://www.nature.com/palcomms/about

DOI: 10.1057/s41599-025-05095-1

Access Statistics for this article

More articles in Palgrave Communications from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().