The Urban–Rural Gap of Chinese Household Finance. Issue 2 (26th January 2018)

• Record Type: Journal Article
• Authors: Sui, Yubing; Niu, Geng
• Is Part Of: Emerging markets finance & trade. Volume 54:Issue 2(2018)
• Page Start: 377
• Page End: 392
• Publication Date: 2018-01-26
• Subjects: Chinese economy -- decomposition analysis -- financial inclusion -- household finance -- urban–rural divide; G11 -- G21 -- D14; Balkan Peninsula -- Commerce -- Periodicals; Balkan Peninsula -- Foreign economic relations -- Periodicals; Europe, Central -- Commerce -- Periodicals; Europe, Central -- Foreign economic relations -- Periodicals; Europe, Eastern -- Commerce -- Periodicals; Europe, Eastern -- Foreign economic relations -- Periodicals; Turkey -- Commerce -- Periodicals; Turkey -- Foreign economic relations -- Periodicals; Asia -- Commerce -- Periodicals; Asia -- Foreign economic relations -- Periodicals; Eurasia -- Commerce -- Periodicals; Eurasia -- Foreign economic relations -- Periodicals; 382.05
• DOI: 10.1080/1540496X.2017.1367660
• Languages: English
• ISSNs: 1540-496X

Abstract

ABSTRACT: Using data from a large household survey, we investigate the size of China's urban–rural gap in ownership of bank deposits, risky financial assets, and credit cards. We further examine the factors underlying the gap using decomposition analysis. Compared to their urban counterparts, rural Chinese are much less likely to own a variety of financial products. Both demand-side barriers and supply-side barriers to financial inclusion exist in China. More, we use instrumental variable analysis to address the endogeneity of the local supply of financial service. Above all, our study indicates that a large financial services vacuum in rural areas needs to be filled.