IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v59y2024ics1544612323010826.html
   My bibliography  Save this article

Do social networks affect household financial vulnerability? Evidence from China

Author

Listed:
  • Chen, Bo
  • Zeng, Ning
  • Tam, Kwo Ping

Abstract

Using data from China Family Panel Studies (CFPS) in 2018, we first examine the impact of social networks on household financial vulnerability and find that social networks significantly reduce the probability of household financial vulnerability. In particular, we find that there is a noticeably larger mitigating effect of social networks on household financial vulnerability among households with higher indebtedness. We also find that social networks can reduce household financial vulnerability, regardless of whether households have commercial insurance or not. Further, we investigate how social networks affect household financial vulnerability. Evidence suggests that social networks can mitigate household financial vulnerability by encouraging informal debt from family or friends and improving financial literacy. Our empirical results are still robust when we address the potential endogeneity problem arising from social networks.

Suggested Citation

  • Chen, Bo & Zeng, Ning & Tam, Kwo Ping, 2024. "Do social networks affect household financial vulnerability? Evidence from China," Finance Research Letters, Elsevier, vol. 59(C).
    • Handle: RePEc:eee:finlet:v:59:y:2024:i:c:s1544612323010826
    DOI: 10.1016/j.frl.2023.104710
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612323010826
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2023.104710?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.

    More about this item

    Keywords

    Financial vulnerability; Financial literacy; Household finance; Social networks; Informal risk sharing;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy

    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:finlet:v:59:y:2024:i:c:s1544612323010826. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    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.