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Does broadband infrastructure promote households’ welfare in wealth management? Evidence from the construction of cell towers and the purchase of Yu’E Bao in China

Author

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  • Deng, Jiapin
  • Li, Xiaoxia
  • Liu, Yanchu

Abstract

Marshalling a large and novel dataset of cell towers and using the purchase of Yu’E Bao as a proxy for Chinese households’ investment in money market funds, this paper investigates how broadband infrastructure affects the welfare of households in wealth management. We find that with the improvement in broadband infrastructure, Internet service becomes more available to households and they tend to convert bank deposits with suppressed rates of interest into money market funds that provide less regulated and hence higher rates of return. Further analyses show that the effect of broadband infrastructure on the conversion of bank deposits into money market funds is more pronounced in counties with lower density of bank branches and among less educated people. Our empirical findings suggest that by alleviating the policy distortions imposed on the traditional banking sector, online financial products and service are powerful tools in the promotion of financial inclusion.

Suggested Citation

  • Deng, Jiapin & Li, Xiaoxia & Liu, Yanchu, 2025. "Does broadband infrastructure promote households’ welfare in wealth management? Evidence from the construction of cell towers and the purchase of Yu’E Bao in China," Journal of Banking & Finance, Elsevier, vol. 181(C).
    • Handle: RePEc:eee:jbfina:v:181:y:2025:i:c:s0378426625001967
    DOI: 10.1016/j.jbankfin.2025.107576
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    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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