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Land disasters and farmers’ private credit

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  • Fu, Zhenqi
  • Tao, Yunqing

Abstract

Using data from the China Land Economic Survey (CLES), we study the impact of land disasters on farmers’ private credit. The results show that land disasters significantly promote the probability of farmers’ private credit. The mechanism is that land disasters reduce farmers’ incomes and increase farmers’ expenditures for restoring production, which directly increase farmers’ demand for credit. In addition, the frequent occurrence of land disasters force farmers to unite to resist disasters, which increase mutual trust among farmers and provide a social foundation for the development of private credit. Finally, farmers have certain stratified characteristics in response to land disasters.

Suggested Citation

  • Fu, Zhenqi & Tao, Yunqing, 2022. "Land disasters and farmers’ private credit," Finance Research Letters, Elsevier, vol. 47(PB).
    • Handle: RePEc:eee:finlet:v:47:y:2022:i:pb:s1544612322001088
    DOI: 10.1016/j.frl.2022.102796
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    References listed on IDEAS

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    5. Benjamin L. Collier & Volodymyr O. Babich, 2019. "Financing Recovery After Disasters: Explaining Community Credit Market Responses to Severe Events," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 86(2), pages 479-520, June.
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    Cited by:

    1. Qi, Xiulin & Song, Changxing & Jin, Nuo & Wu, He, 2023. "Does dialect diversity change household credit channel choice?," Finance Research Letters, Elsevier, vol. 57(C).

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