IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v27y2013icp94-103.html
   My bibliography  Save this article

Microfinance, self-employment, and entrepreneurs in less developed areas of rural China

Author

Listed:
  • Jia, Xiangping
  • Xiang, Cheng
  • Huang, Jikun

Abstract

China is experiencing a transformation, as vast numbers of rural laborers move toward off-farm employment. In such a transformation, the role of credit is unclear. The overall goal of this study is to examine the impact of access to credit by rural households on employment decision-making by rural laborers in China. Based on longitudinal data concerning 1992 rural households in China, this study finds that the use of credit is immense in rural China. Among different types of credit, access to microfinance significantly increased farmers' time working on self-employment activities, especially for the poor households. Credit from formal financial institutions and informal networks had no such effect.

Suggested Citation

  • Jia, Xiangping & Xiang, Cheng & Huang, Jikun, 2013. "Microfinance, self-employment, and entrepreneurs in less developed areas of rural China," China Economic Review, Elsevier, vol. 27(C), pages 94-103.
    • Handle: RePEc:eee:chieco:v:27:y:2013:i:c:p:94-103
    DOI: 10.1016/j.chieco.2013.09.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X1300076X
    Download Restriction: Full text for ScienceDirect subscribers only

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

    References listed on IDEAS

    as
    1. Knight, John & Deng, Quheng & Li, Shi, 2011. "The puzzle of migrant labour shortage and rural labour surplus in China," China Economic Review, Elsevier, vol. 22(4), pages 585-600.
    2. Dean Karlan & Jonathan Zinman, 2010. "Expanding Credit Access: Using Randomized Supply Decisions to Estimate the Impacts," Review of Financial Studies, Society for Financial Studies, vol. 23(1), pages 433-464, January.
    3. Robert Cull & Asli Demirgüç-Kunt & Jonathan Morduch, 2009. "Microfinance Meets the Market," Journal of Economic Perspectives, American Economic Association, vol. 23(1), pages 167-192, Winter.
    4. John Knight & Li Shi, 1997. "Cumulative causation and inequality among villages in China," Oxford Development Studies, Taylor & Francis Journals, vol. 25(2), pages 149-172.
    5. Xiangping Jia & Franz Heidhues & Manfred Zeller, 2010. "Credit rationing of rural households in China," Agricultural Finance Review, Emerald Group Publishing, vol. 70(1), pages 37-54, May.
    6. Huffman, Wallace E., 1991. "Agricultural Household Models: Survey and Critique," Staff General Research Papers Archive 11008, Iowa State University, Department of Economics.
    7. Signe-Mary McKernan, 2002. "The Impact Of Microcredit Programs On Self-Employment Profits: Do Noncredit Program Aspects Matter?," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 93-115, February.
    8. Hongbin Li & Scott Rozelle & Linxiu Zhang, 2004. "Micro-credit programs and off-farm migration in China," Pacific Economic Review, Wiley Blackwell, vol. 9(3), pages 209-223, October.
    9. Jian Zhang & Linxiu Zhang & Scott Rozelle & Steve Boucher, 2006. "Self-Employment With Chinese Characteristics: The Forgotten Engine Of Rural China'S Growth," Contemporary Economic Policy, Western Economic Association International, vol. 24(3), pages 446-458, July.
    10. Nidhiya Menon & Yana van der Meulen Rodgers, 2011. "How Access to Credit Affects Self-employment: Differences by Gender during India's Rural Banking Reform," Journal of Development Studies, Taylor & Francis Journals, vol. 47(1), pages 48-69.
    11. Zhao, Yaohui, 1999. "Labor Migration and Earnings Differences: The Case of Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 47(4), pages 767-782, July.
    12. Joseph P. Kaboski & Robert M. Townsend, 2011. "A Structural Evaluation of a Large‐Scale Quasi‐Experimental Microfinance Initiative," Econometrica, Econometric Society, vol. 79(5), pages 1357-1406, September.
    13. Yoko Kijima & Tomoya Matsumoto & Takashi Yamano, 2006. "Nonfarm employment, agricultural shocks, and poverty dynamics: evidence from rural Uganda," Agricultural Economics, International Association of Agricultural Economists, vol. 35(s3), pages 459-467, November.
    14. Huang, Jikun & Wang, Xiaobing & Zhi, Huayong & Huang, Zhurong & Rozelle, Scott, 2011. "Subsidies and distortions in China’s agriculture: evidence from producer-level data," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(1), pages 1-19.
    15. Park, Albert & Ren, Changqing, 2001. "Microfinance with Chinese Characteristics," World Development, Elsevier, vol. 29(1), pages 39-62, January.
    16. McIntosh, Craig & Villaran, Gonzalo & Wydick, Bruce, 2011. "Microfinance and Home Improvement: Using Retrospective Panel Data to Measure Program Effects on Fundamental Events," World Development, Elsevier, vol. 39(6), pages 922-937, June.
    17. Wang, Xiaobing & Huang, Jikun & Zhang, Linxiu & Rozelle, Scott, 2011. "The rise of migration and the fall of self employment in rural China's labor market," China Economic Review, Elsevier, vol. 22(4), pages 573-584.
    18. de Brauw, Alan & Huang, Jikun & Rozelle, Scott & Zhang, Linxiu & Zhang, Yigang, 2002. "The Evolution of China's Rural Labor Markets During the Reforms," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 329-353, June.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Liqiong Lin & Weizhuo Wang & Christopher Gan & David A. Cohen & Quang T.T Nguyen, 2019. "Rural Credit Constraint and Informal Rural Credit Accessibility in China," Sustainability, MDPI, Open Access Journal, vol. 11(7), pages 1-20, April.
    2. repec:kap:jfamec:v:38:y:2017:i:4:d:10.1007_s10834-017-9531-x is not listed on IDEAS
    3. Liu, Ying & Huang, Jikun & Zikhali, Precious, 2016. "The bittersweet fruits of industrialization in rural China: The cost of environment and the benefit from off-farm employment," China Economic Review, Elsevier, vol. 38(C), pages 1-10.
    4. Yuan, Yan & Xu, Lihe, 2015. "Are poor able to access the informal credit market? Evidence from rural households in China," China Economic Review, Elsevier, vol. 33(C), pages 232-246.
    5. Liqiong Lin & Weizhuo Wang & Christopher Gan & Quang T. T. Nguyen, 2019. "Credit Constraints on Farm Household Welfare in Rural China: Evidence from Fujian Province," Sustainability, MDPI, Open Access Journal, vol. 11(11), pages 1-19, June.
    6. repec:kqi:journl:2017-1-2 is not listed on IDEAS
    7. repec:kqi:journl:2017-1-1-2 is not listed on IDEAS
    8. repec:pal:eurjdr:v:31:y:2019:i:3:d:10.1057_s41287-018-0158-z is not listed on IDEAS

    More about this item

    Keywords

    Off-farm; Self-employment; Credit; Labor; Poverty;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

    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:eee:chieco:v:27:y:2013:i:c:p:94-103. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/chieco .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.