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Guaxi and financial exclusion: Empirical evidence from households in China

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  • Zhu, Kehan
  • Zhou, Yuhong
  • Zhao, Jingmei

Abstract

The world has attached great importance to the development of inclusive finance. As the most populous country, the promotion of inclusive finance in China is crucial to the realization of global financial inclusion. Guanxi, translated as social relations, is the core structure of Chinese society. Whether and how Guanxi affects financial exclusion has attracted special attention. Using data from the China Household Finance Survey (CHFS) in 2017, this study found Guanxi has a significantly negative impact on household financial exclusion, and the impact on liability financial exclusion is greater than that on asset financial exclusion. This study also shows that Guanxi will promote household participation in financial markets by increasing information transmission and knowledge dissemination and reducing the probability of asset financial exclusion. Guanxi could alleviate liability financial exclusion by facilitating information transmission, providing soft information and guarantees.

Suggested Citation

  • Zhu, Kehan & Zhou, Yuhong & Zhao, Jingmei, 2021. "Guaxi and financial exclusion: Empirical evidence from households in China," Pacific-Basin Finance Journal, Elsevier, vol. 67(C).
    • Handle: RePEc:eee:pacfin:v:67:y:2021:i:c:s0927538x21000731
    DOI: 10.1016/j.pacfin.2021.101566
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    Cited by:

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    2. Zhang, Jiaping & Zhang, Huirong & Gong, Xiaomei, 2022. "Mobile payment and rural household consumption: Evidence from China," Telecommunications Policy, Elsevier, vol. 46(3).
    3. Jiang, Cuixia & Zhou, Li & Xu, Qifa & Liu, Yezheng, 2022. "Home bias in reward-based crowdfunding and its impact on financing performance: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 76(C).

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    More about this item

    Keywords

    Financial inclusion; Financial exclusion; Social relations;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G5 - Financial Economics - - Household Finance
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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