Infrastructure, Urbanization, and Demand for Bank and Non-Bank Loans of Households in the People's Republic of China
Lyons, Angela C.; Grable, John E.; Zeng, Ting | July 2017
Abstract
Financial inclusion plays an important role in giving households greater access to borrowing opportunities, which in turn can be used to improve human capital accumulation, socioeconomic status, and long-run economic development. One way to enhance households’ access to and usage of the financial system, especially the formal banking system, is to ensure that an adequate infrastructure exists within their community. This study uses data from the 2013 Chinese Household Finance Survey to investigate how the infrastructure affects the usage of formal bank loans for both urban and rural households in the People’s Republic of China (PRC). The analysis is extended to investigate the impacts of the infrastructure on non-bank loans. The results suggest that the infrastructure, in a variety of forms (e.g., physical, financial, technological, social, and informational), is significantly associated with the loan demand—most notably for urban households using formal bank loans. Further, those living in more urbanized areas and megacities are less likely to demand bank and non-bank loans even after controlling for other factors, suggesting that there may be an “urbanization effect” that is dampening credit access and usage. The potential endogeneity between the infrastructure and the loan demand is taken into consideration. The results show that decisions related to the loan demand and infrastructure mostly appear to be made independently. The findings from this research have important implications for the PRC and other countries working on national strategies aimed at improving financial inclusion, especially the expansion of bank credit in rapidly growing urbanized areas, where the infrastructure may be reaching capacity.
Citation
Lyons, Angela C.; Grable, John E.; Zeng, Ting. 2017. Infrastructure, Urbanization, and Demand for Bank and Non-Bank Loans of Households in the People's Republic of China. © Asian Development Bank Institute. http://hdl.handle.net/11540/7629.Keywords
Taxation
Public Accounting
National Budget
Municipal Bonds
Local Government
Local Taxes
International Monetary Relations
International Financial Market
International Banking
Central Banks
Business Financing
Capital Resources
Budgetary Policy
Capital Needs
Corporate Divestiture
Capital Instruments
Pension Funds
Insurance Companies
Banks
Portfolio Management
Fiscal Administration
Economics of Education
Development Banks
Urban Plans
Urbanism
Urban agriculture
Economic Development
Rural Urban Migration
Cities
Urban Development Finance
Trade Finance
Small Business Finance
Rural Finance
Roundtable on International Trade and Finance
Regional Development Finance
Public Service Finance
Public Finance
Project Finance
Private Finance
Nonbank Financing
Non-Bank Financial Institutions
Municipal Finance
Local Government Finance
Local Currency Financing
Limited Resource Financing
International Financial Institutions
Infrastructure Financing
Industrial Finance
Government Financial Institutions
Government Finance
Financing of Infrastructure
Financial Sector Development
Financial Regulation
Urbanization
Urban Services
Urban Projects
Urban Problems
Urban Poverty
Urban Policy
Urban Planning
Urban Infrastructure
Urban Health
Urban Government
Urban Economic Development
Urban Development Finance
Urban Development
Urban Conditions
Urban Communities
Urban Population
Use tax
Taxing power
State of taxation
Tax-sales
Tax revenue estimating
Tax planning
Spendings tax
Special assessments
Tax administration and procedure
Sales tax
Real property and taxation
Progressive taxation
Effect of taxation on land use
Effect of taxation on labor supply
Intergovernmental tax relations
Inheritance and transfer tax
Energy tax
Local government
Urban renewal
Urban housing
Urban sociology
Transit systems
Rapid transit
Public transit
Mass transit
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