FINANCIAL AVAILABILITY, INCOME GAP AND HOUSEHOLD CONSUMPTION RATE IN TRANSITIONAL CHINA: A THEORETICAL APPROACH AND EMPIRICAL TEST

Based on the characteristics of financial exclusion and income gap, this paper attempted to elucidate the fluctuation of China’s consumption rate through the mechanism of financial availability of low-income residents and its influence on household consumption in the reform era. The study showed tha...

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Veröffentlicht in:Singapore economic review 2021-04, p.1-21
Hauptverfasser: GUO, NIANZHI, TSAO, HAI-TAO, ZHAO, DI
Format: Artikel
Sprache:eng
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Zusammenfassung:Based on the characteristics of financial exclusion and income gap, this paper attempted to elucidate the fluctuation of China’s consumption rate through the mechanism of financial availability of low-income residents and its influence on household consumption in the reform era. The study showed that improving financial availability affects the consumption rate by increasing investment opportunities for low-income earners who can adjust the portfolio of composition. Meanwhile, this effect is affected by the income gap which plays a “threshold” role in the relationship between financial availability and consumption rate. Therefore, inclusive finance development must be adapted to economic development in order to prevent “too much finance”.
ISSN:0217-5908
1793-6837
DOI:10.1142/S0217590821500247