Social capital, finance, and consumption: evidence from a representative sample of Chinese households

Robert J. Cull, Li Gan, Nan Gao, L. Colin Xu, Robert J. Cull, Li Gan, Nan Gao and L. Colin Xu
Authors registered in the RePEc Author Service: Robert Cull, Lixin Colin Xu and Li Gan ()

No 7873, Policy Research Working Paper Series from The World Bank

Abstract: Using a new, nationally representative sample of Chinese households, this paper studies how social capital affects access to credit and its implications for consumption levels. The paper focuses on two specific forms of social capital: private social networks and membership in the Communist Party. Although party affiliation is linked to higher consumption in rural areas, those benefits are direct and thus do not work through credit markets. The main finding is a strong link between private social networks, use of informal credit, and household consumption. Instrumental variable regressions indicate that the link is causal. However, the study finds no evidence that social capital has facilitated formal credit market development in China, as it has in countries with higher levels of private sector development.

Keywords: Educational Sciences; Urban Governance and Management; Municipal Management and Reform; Urban Housing; Urban Housing and Land Settlements; Access to Finance; Transport Services; Marketing; Private Sector Economics; Private Sector Development Law (search for similar items in EconPapers)
Date: 2016-10-24
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Social capital, finance, and consumption: Evidence from a representative sample of Chinese households (2022)
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