Do low-income households inevitably benefit more from microfinance participation? Evidence from rural China

Zhao Ding, Xinyi Fan and Wonder Agbenyo

Journal of the Asia Pacific Economy, 2024, vol. 29, issue 4, 2087-2109

Abstract: It is widely accepted that microfinance has the potential to contribute to household welfare in developing countries, while few studies have highlighted the extent to which microfinance contributes to low-income rural households. This article employs household-level data to identify factors that influence low-income households’ decisions to participate in microfinance for farming production activities, and how these factors and microfinance affect agricultural income. The study applies an endogenous switching regression model to account for the selection bias and treatment effect, and uses a decomposition method to examine the direction and extent of the effect of participating in microfinance on the agricultural income gap of rural households. The empirical findings show that the participation of low-income households in microfinance has significantly increased their agricultural income. In addition, the study further shows that microfinance has exacerbated the agricultural income gap of rural households.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/13547860.2023.2204686 (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:taf:rjapxx:v:29:y:2024:i:4:p:2087-2109

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rjap20

DOI: 10.1080/13547860.2023.2204686

Access Statistics for this article

Journal of the Asia Pacific Economy is currently edited by Leong Liew

More articles in Journal of the Asia Pacific Economy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().