Does Credit Expansion Promote Common Prosperity? Evidence from County-Level Urban–Rural Income Disparities

Ziyun Wang, Zhe Li (), Di Hu, Wushen Huang and Wenze Xiong
Additional contact information
Ziyun Wang: Hainan Vocational University of Science and Technology
Zhe Li: City University of Macau
Di Hu: City University of Macau
Wushen Huang: City University of Macau
Wenze Xiong: University of Auckland, School of Business

A chapter in Proceedings of the 2026 3rd International Conference on Applied Economics, Management Science and Social Development (AEMSS 2026), 2026, pp 342-350 from Springer

Abstract: Abstract The focus of common prosperity is to narrow the income gap between urban and rural residents. However, whether the credit expansion really benefits the rural and low-income groups, the existing research still lacks more detailed evidence. This study uses county panel data to compare the different effects of per capita loan expansion on the incomes of urban residents and rural residents. In this paper, the two-way fixed effect model is used to control the county fixed effect and the year fixed effect. At the same time, this paper uses a stacked uniform framework to put urban and rural samples in the same regression, and directly compares the elastic differences between urban and rural income and credit. The results show that the marginal effect of credit expansion on rural income is obviously weaker than that on urban income. Robustness test generally supports the conclusion that “towns benefit and rural areas are suppressed”. Therefore, if more credit resources flow to urban sectors or capital-intensive sectors, financial expansion may increase the difference in income responses between urban and rural areas, thus constraining the goal of common prosperity.

Keywords: Common Prosperity; Urban–rural Income Gap; Credit Expansion (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:advbcp:978-94-6239-672-2_32

Ordering information: This item can be ordered from
http://www.springer.com/9789462396722

DOI: 10.2991/978-94-6239-672-2_32

Access Statistics for this chapter

More chapters in Advances in Economics, Business and Management Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().