Social Network

  • 详情 Research on the Mechanism Involved in Urban Inclusiveness and Resident Entrepreneurship: Evidence from China
    Based on three key principles, "equity, openness, and sharing," this paper assesses the relationship, and the internal mechanism driving the relationship, between urban inclusiveness and resident entrepreneurship. This includes constructing an urban inclusiveness index, and analyzing data from the 2018 China General Social Survey (CGSS). The key results indicate that multi-perspective urban inclusiveness has a significant positive effect on resident entrepreneurship. The mechanism analysis shows that urban inclusiveness can improve the probability of residents being entrepreneurial, by improving risk attitude, promoting class mobility, and expanding social networks. A heterogeneity analysis shows that urban inclusiveness has a significant impact on the entrepreneurial choice of local residents, and low-class and high-class residents; urban inclusiveness has no significant impact on the entrepreneurial choice of transient residents and middle-class residents. In addition, urban inclusiveness plays a more significant role in promoting residents’ choice of survival entrepreneurship, compared with opportunistic entrepreneurship. The research conclusions have important policy implications for constructing inclusive cities and for promoting innovation and entrepreneurship vitality.
  • 详情 A multidimensional approach to measuring the risk tolerance of households in China
    Evidence from the U.S. and Europe suggests that current risk assessment tools used by researchers and financial professionals to determine individuals’ risk tolerance and provide suitable portfolio recommendations may be flawed due to “mis”perceptions of risk. Limited research has examined the reliability of these tools as measures of relative risk tolerance for households in emerging economies like China. This study develops a multidimensional index of risk tolerance specifically tailored for Chinese households using a psychometric approach. The effectiveness of this multidimensional index in predicting individuals’ financial decisions is tested and compared to traditional unidimensional measures of risk tolerance commonly used in developed countries. The findings indicate that multidimensional measures are more consistent and significant predictors of Chinese households’ investment decisions. Additionally, the study uncovers evidence that cultural differences, related to market expectations and social networks, which are often overlooked in U.S. and European models, play a crucial role in shaping individuals' risk perceptions and investment choices in China. Robustness checks were conducted to account for potential endogeneity between risk tolerance and investment decisions. The findings provide valuable insights for researchers and financial professionals seeking to develop more accurate risk assessment tools that capture risk attitudes and perceptions in China and other developing countries. By adopting a multidimensional approach that accounts for cultural and psychosocial factors, these improved tools can enhance the precision of risk evaluation and facilitate more appropriate investment recommendations.
  • 详情 Cream-skimming in Private Loan Market: Evidence from the Opening of High-Speed Railway
    This study investigates the association between the expansion of formal finance through the opening of high-speed railway (HSR) and the risk of private lending in China, using data from China Judgments Online. The study employs a difference-in-differences approach and reveals that the cities connected by HSR have a greater risk of private lending and that the formal finance expansion leads to a cream-skimming effect on private lending. The HSR enhances the efficiency of product supply and pricing of formal financial institutions, which results in the expansion of banks. However, private lending relies heavily on social networks, which limits the direct effect of HSR on it. Consequently, the formal finance expansion facilitated by HSR has a significant cream-skimming effect on private lending, which increases the risk of private lending. These results make a significant contribution to the existing literature on the economic implications of formal financial expansion for private lending.
  • 详情 Hukou and Guanxi: How Social Discrimination and Networks Impact Intrahousehold Allocations in China
    Hukou, China’s household registration system, affects access to public services and signals the strength of a person’s local social network, guanxi. We use a collective model and data on household consumption and spouses’ hukou status to show that hukou plays a crucial role in determining within-family bargaining power. Wives who bring the family more lucrative hukou enjoy significantly higher bargaining power than other wives. Still, these wives have less bargaining power than their husbands. Large differences in preferences between husbands and wives, especially regarding alcohol, tobacco, and clothing, allow us to identify these disparities.
  • 详情 The dichotomy of social networks: Politicians’ hometown ties and intercity investment in China
    We examine how hometown ties among local politicians affect capital allocation in China. We use a difference-in-differences design that relies on the exogenous replacements of city officials. Our results indicate that hometown ties between city party secretaries increase city-dyad investment by 10% and firm registrations by 1%. These effects are larger between distant cities and for the investment of small and private firms. Comparing the effects before and after the Chinese anti-corruption campaign, we provide nuanced evidence showing that, although hometown ties may entice the rent-seeking activities of officials, such activities may promote economic growth.
  • 详情 数字足迹作为收债的抵押品
    We examine the role of borrowers' digital footprints in debt collection. Using a large sample of personal loans from a fintech lender in China, we find that the information acquired by the lender through borrowers' digital footprints can increase the repayment likelihood on delinquent loans by 18.5%. The effect can be explained by two channels: bonding borrowers' obligations with their social networks and locating borrowers' physical locations. Moreover, the lender is more likely to approve loan applications from borrowers with digital footprints, even though these borrowers may occasionally have a higher likelihood of delinquency. The use of digital footprints can remain legitimate under stringent privacy protection regulations and fair debt collection practices. Our findings suggest that digital footprints, as a new type of collateral, can ultimately enhance financial inclusion by facilitating the lender's collection of delinquent loans.
  • 详情 Digital Footprints as Collateral for Debt Collection
    We examine the role of borrowers’ digital footprints in debt collection. Using a large sample of personal loans from a fintech lender in China, we find that the information acquired by the lender through borrowers’ digital footprints can increase the repayment likelihood on delinquent loans by 18.5%. The effect can be explained by two channels: bonding borrowers’ obligations with their social networks and locating borrowers’ physical locations. Moreover, the lender is more likely to approve loan applications from borrowers with digital footprints, even though these borrowers may occasionally have a higher likelihood of delinquency. The use of digital footprints can remain legitimate under stringent privacy protection regulations and fair debt collection practices. Our findings suggest that digital footprints, as a new type of collateral, can ultimately enhance financial inclusion by facilitating the lender’s collection of delinquent loans.