IDEAS home Printed from https://ideas.repec.org/a/mes/emfitr/v58y2022i2p570-583.html
   My bibliography  Save this article

Credit Constraints and Rural Households’ Entrepreneurial Performance in China

Author

Listed:
  • Chen Weng
  • Hui Wang
  • Nico Heerink
  • Marrit van den Berg

Abstract

Based on data from the China Household Finance Survey, this article investigates the relationship between formal sector credit constraints and rural households’ entrepreneurial performance. Using an endogenous switching regression model, we find that credit-constrained entrepreneurial households’ profits are significantly and positively affected by credit access, which is measured by total formal and informal production loans owed. With an extra RMB 10,000 in credit, constrained entrepreneurial households’ average profits would be raised from RMB 10,604 to RMB 10,732 (i.e. by 1.2%). Entrepreneurial profits of households that are not credit-constrained do not depend on loan sizes. Based on our findings, we stress the importance of the development of new-type rural financial institutions, proper compensations for expropriated land, and stimulating savings and investments in different types of assets for improving the performance of rural entrepreneurs.

Suggested Citation

  • Chen Weng & Hui Wang & Nico Heerink & Marrit van den Berg, 2022. "Credit Constraints and Rural Households’ Entrepreneurial Performance in China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(2), pages 570-583, January.
    • Handle: RePEc:mes:emfitr:v:58:y:2022:i:2:p:570-583
    DOI: 10.1080/1540496X.2020.1788538
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1540496X.2020.1788538
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1540496X.2020.1788538?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Francis Lwesya & Adam Beni Swebe Mwakalobo, 2023. "Frontiers in microfinance research for small and medium enterprises (SMEs) and microfinance institutions (MFIs): a bibliometric analysis," Future Business Journal, Springer, vol. 9(1), pages 1-18, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:emfitr:v:58:y:2022:i:2:p:570-583. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MREE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.