IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v88y2023icp60-72.html
   My bibliography  Save this article

Religion and household borrowing: Evidence from China

Author

Listed:
  • Feng, Dawei
  • Gao, Mengtao
  • Zhou, Li

Abstract

This study investigates the effect of religious beliefs on household borrowing behaviors from theoretical and empirical perspectives using microdata from the China Family Panel Studies (CFPS). The empirical results reveal that religious beliefs significantly increase households’ willingness to borrow. After propensity score matching, panel-fixed effect, instrumental variables regression, and robustness checks, the positive relationship remained. The mechanism analysis revealed that religious beliefs promote household borrowing by enhancing social networks. The effect of religious beliefs on household borrowing is more significant in rural areas with low income and low cognitive ability, but mainly promotes informal household borrowing, indirectly providing evidence of the underlying mechanism. Thus, this study plays an important role in guiding residents to hold reasonable religious beliefs and highlights the role of informal institutions in promoting the smooth development of the lending market.

Suggested Citation

  • Feng, Dawei & Gao, Mengtao & Zhou, Li, 2023. "Religion and household borrowing: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 88(C), pages 60-72.
    • Handle: RePEc:eee:reveco:v:88:y:2023:i:c:p:60-72
    DOI: 10.1016/j.iref.2023.06.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056023001740
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2023.06.006?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.

    References listed on IDEAS

    as
    1. Ruffle Bradley J. & Sosis Richard, 2007. "Does It Pay To Pray? Costly Ritual and Cooperation," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-37, March.
    2. Zhang, Xiaobo & Li, Guo, 2003. "Does guanxi matter to nonfarm employment?," Journal of Comparative Economics, Elsevier, vol. 31(2), pages 315-331, June.
    3. Chaim Fershtman & Uri Gneezy & Frank Verboven, 2005. "Discrimination and Nepotism: The Efficiency of the Anonymity Rule," The Journal of Legal Studies, University of Chicago Press, vol. 34(2), pages 371-396, June.
    4. Liu, Zhiqiang, 2003. "The Economic Impact and Determinants of Investment in Human and Political Capital in China," Economic Development and Cultural Change, University of Chicago Press, vol. 51(4), pages 823-849, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hou, Benyufang & Liu, Hong & Wang, Sophie Xuefei, 2020. "Returns to military service in off-farm wage employment: Evidence from rural China," China Economic Review, Elsevier, vol. 59(C).
    2. Tingqiu Cao & Xianhang Qian, 2021. "Political Capital and Household Income: Evidence from Twenty-Four Transition Countries," Journal of Family and Economic Issues, Springer, vol. 42(1), pages 151-165, March.
    3. Liwen Chen & Bobby Chung & Guanghua Wang, 2021. "Exposure to Socially Influential Peer Parents: Evidence from Cadre Parents in China," Working Papers 2021-052, Human Capital and Economic Opportunity Working Group.
    4. Zhao, Chunkai & Li, Xing, 2022. "Living under the shadow: Adverse childhood experiences and entrepreneurial behaviors in Chinese adults," Journal of Business Research, Elsevier, vol. 138(C), pages 239-255.
    5. Tan, Jonathan H.W. & Vogel, Claudia, 2008. "Religion and trust: An experimental study," Journal of Economic Psychology, Elsevier, vol. 29(6), pages 832-848, December.
    6. Hong, Yan-Zhen & Su, Yi-Ju & Chang, Hung-Hao, 2023. "Analyzing the relationship between income and life satisfaction of Forest farm households - a behavioral economics approach," Forest Policy and Economics, Elsevier, vol. 148(C).
    7. Simon Appleton & John Knight & Lina Song & Qingjie Xia, 2009. "The Economics of Communist Party Membership: The Curious Case of Rising Numbers and Wage Premium during China's Transition," Journal of Development Studies, Taylor & Francis Journals, vol. 45(2), pages 256-275.
    8. Lee, Liane W.Y. & Tang, Yiming & Yip, Leslie S.C. & Sharma, Piyush, 2018. "Managing customer relationships in the emerging markets – guanxi as a driver of Chinese customer loyalty," Journal of Business Research, Elsevier, vol. 86(C), pages 356-365.
    9. Sangui Wang & Lijuan Zheng, 2024. "The Impacts of the Poverty Alleviation Relocation Program (PARP) on Households’ Education Investment: Evidence from a Quasi-Experiment in Rural China," Sustainability, MDPI, vol. 16(10), pages 1-23, May.
    10. Olof Johansson‐Stenman & Minhaj Mahmud & Peter Martinsson, 2009. "Trust and Religion: Experimental Evidence from Rural Bangladesh," Economica, London School of Economics and Political Science, vol. 76(303), pages 462-485, July.
    11. Jacquemet, Nicolas & Yannelis, Constantine, 2012. "Indiscriminate discrimination: A correspondence test for ethnic homophily in the Chicago labor market," Labour Economics, Elsevier, vol. 19(6), pages 824-832.
    12. Hu, Jinyan & Jiang, Mingming & Zhang, Bo, 2015. "Social Network, Financial Market Participation and Asset Allocation: Evidence from China," RIEI Working Papers 2015-06, Xi'an Jiaotong-Liverpool University, Research Institute for Economic Integration.
    13. Vendryes, Thomas, 2011. "Migration constraints and development: Hukou and capital accumulation in China," China Economic Review, Elsevier, vol. 22(4), pages 669-692.
    14. Werner, Katharina & Graf Lambsdorff, Johann, 2016. "Emotional numbing and lessons learned after a violent conflict - Experimental evidence from Ambon, Indonesia," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-74-16, University of Passau, Faculty of Business and Economics.
    15. Ming Lu & Shiqing Jiang, 2008. "Labor Market Reform, Income Inequality and Economic Growth in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 16(6), pages 63-80, November.
    16. Ahmed, Ali M., 2007. "Group identity, social distance and intergroup bias," Journal of Economic Psychology, Elsevier, vol. 28(3), pages 324-337, June.
    17. Susann Fiedler & Dshamilja Marie Hellmann & Angela Rachael Dorrough & Andreas Glöckner, 2018. "Cross-national in-group favoritism in prosocial behavior: Evidence from Latin and North America," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 13(1), pages 42-60, January.
    18. Wang, Ruixin, 2016. "Who Should I Share Risk with? Gifts can tell : Theory and Evidence from Rural China," Other publications TiSEM 95c6dbed-3f49-4d5a-987e-2, Tilburg University, School of Economics and Management.
    19. Salamanca Nicolas & Feld Jan, 2017. "A Short Note on Discrimination and Favoritism in the Labor Market," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 17(1), pages 1-10, January.
    20. Jan Feld & Nicolás Salamanca & Daniel S. Hamermesh, 2016. "Endophilia or Exophobia: Beyond Discrimination," Economic Journal, Royal Economic Society, vol. 126(594), pages 1503-1527, August.

    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:reveco:v:88:y:2023:i:c:p:60-72. 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.

    If CitEc recognized a bibliographic 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.

    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/inca/620165 .

    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.