Risk Rationing in China Rural Credit Markets
AbstractThe purpose of this paper is to provide a specific test of Boucher, Carter et al. (2008) framework on risk rationing. The data were collected through a survey of 730 farm households in Shaanxi province conducted in November 2010. We compare factor associated with risk rationed, quantity rationed and price rationed farmers. Seemingly unrelated regressions are performed using risk rationing, quantity rationing and price rationing measure as the dependent variable and measures of demography, wealth, income, year of farming and risk aversion as independent variables. We apply seemingly unrelated regression, cluster analysis and cross tabulation in the study. According to a seemingly unrelated regression, we find existing risk rationing is due to risk-based behavior by borrowers. A cross tabulation results support the proposition by Boucher, Carter et al showing the financial wealthy is risk rationed and relatively land-poor is risk rationed. This paper is believed to be among the first empirical validation of the risk rationing theory.
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Bibliographic InfoPaper provided by Agricultural and Applied Economics Association in its series 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania with number 104021.
Date of creation: 2011
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Risk rationing; credit market; china; Marketing; Risk and Uncertainty;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-24 (All new papers)
- NEP-MFD-2011-05-24 (Microfinance)
- NEP-TRA-2011-05-24 (Transition Economics)
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