The Research On Household Financial Exclusion In China:Influencing Factors And Mechanisms

Since the concept of inclusive finance was put forward by the United Nations,various countries and international organizations have made great efforts to build an inclusive financial system.As the most populous country,the promotion of inclusive finance in China is crucial to the realization of the goal of global financial inclusion.Financial exclusion and financial inclusion are two aspects of the same problem.Financial exclusion is defined as certain processes that prevent certain social classes or individuals from obtaining formal financial services(Leyshon and Thrift,1993,1994,1995).To implement the concept of inclusive finance and build an inclusive financial system is to solve the problem of financial exclusion.A large number of researches indicate that financial exclusion is a universal problem in the world.According to the World Bank,about 31 percent of adults worldwide had no access to any formal financial products or services in 2017.Financial exclusion of Chinese families is also widespread,whether in rural areas or in urban areas.Financial exclusion in China is reflected in two aspects.First,financial development is unbalanced between regions.Financial institutions are less distributed in economically backward and remote areas.Second,financial resource allocation is unbalanced between microeconomic units.With more and more types of financial products and services provided to the rich group and large enterprises,low-income group and micro enterprises have limited access to financial products and services,or even excluded from the formal financial system and cannot obtain the most basic financial products or services.Previous researches on financial exclusion in China focus on the regional differences in financial exclusion at the macro level.On the one hand,unbalanced regional economic and financial development and rural finance have been prominent problems and research hotspots since China's reform and opening up.On the other hand,there is a lack of micro-level statistical data about families in China.Therefore,few literatures in China have paid attention to financial exclusion from the perspective of families at the micro level.As the basic unit of economic and social development,the family is the micro foundation of macroeconomic growth.It is particularly important to pay attention to and solve the problem of family financial exclusion.Lots of studies have confirmed that financial resources can ease household credit constraints,smooth consumption,enhance families' ability to manage risks,reduce vulnerability to poverty,promote entrepreneurship and so on.However,family financial exclusion would result in the widening gap between the rich and the poor,the exacerbating imbalance in economic development and even endanger the social stability.Hence,it is an urgent need to explore the influencing factors and mechanisms of family financial exclusion in China and find solutions.Based on the micro-level data of China Household Financial Survey(CHFS),this paper analyzes the influencing factors and mechanisms of financial exclusion from two aspects: financial demand side(family)and financial supply side(financial institution).Firstly,from the perspective of the financial demand side(family),this paper discusses how the social network,which is the core model of China's social structure,affects the behavior of families and financial institutions,and analyzes the reasons for family financial exclusion based on the internal characteristics of families.Secondly,from the perspective of financial suppliers(financial institutions),this paper analyzes how financial innovation,as an important driving force of financial development,affects the behavior of financial institutions and families,and explores the external factors that influence family financial exclusion.Specifically,based on the financial demand side(family),chapter 3 analyzes the impact of family social network on family financial exclusion.This paper uses the data of CHFS in 2017,selects indicators from four dimensions of social relations,power relations,kinship relations and political relations,and adopts factor analysis method to construct the index of family social network.Then,family financial exclusion is measured according to whether the households have formal financial accounts or not,and divided into asset financial exclusion and liability financial exclusion.After that,the paper makes an empirical analysis on the influence of social network on family financial exclusion and its mechanisms.The findings are as follows: first,social network has a significant negative impact on whether a family is financially excluded,and family social network has a greater impact on whether a family is financially excluded by liabilities than that by assets.Second,social network will promote family participation in the financial market by increasing information transmission and knowledge dissemination,and reduce the probability of family asset financial exclusion.Third,social network could increase the likelihood that families will apply for loans by facilitating information transfer.Social network could also reduce the probability of financial institutions refusing loans by increasing information display to reduce information asymmetry and providing guarantee to increase the credit of the lender,and thus alleviate liability financial exclusion.Based on the financial supplier side(financial institution),chapter 4 analyzes the impact of financial innovation on family financial exclusion.This paper uses the financial patent data of the State Intellectual Property Office in 2015 and 2017 to measure the level of financial innovation in China's provinces.Then,based on the data of CHFS in 2015 and 2017,this chapter measures whether households are financially excluded according to whether they have formal financial accounts,and divides financial exclusion into asset financial exclusion and liability financial exclusion.After that,the paper makes an empirical analysis on the influence of financial innovation on family financial exclusion and its mechanisms.Researching results show that: firstly,financial innovation has a significant negative impact on family financial exclusion;secondly,financial innovation can reduce the transaction cost and thus influence family financial exclusion;thirdly,the mechanism that financial innovation could reduce family financial exclusion by providing more diversified financial products and reducing information asymmetry are not validated.The contribution of this paper is mainly reflected in three aspects: research object,research perspective and research data.First of all,the contribution of research object.Most researches on financial exclusion in China focus on the regional differences in financial exclusion at the macro level.Few literatures in China have paid attention to financial exclusion from the perspective of families at the micro level.Based on the micro-level data of CHFS,this paper investigates the financial exclusion of Chinese families at the micro level,which supplements and enriches the literatures in this field.Moreover,most studies on financial exclusion in China focus on rural areas.This paper takes into account the situation of financial exclusion in both rural and urban areas in China,and makes a comprehensive and overall analysis of the financial exclusion in Chinese households.In the second place,the contribution of research perspective.This paper innovatively analyzes why families are financially excluded from the perspective of social network and financial innovation,providing new ways to interpret the problem of household financial exclusion in China.In addition,this paper makes an in-depth analysis of the influencing mechanisms,which supplements the literatures in this field.Last but not least,the contribution of research data.This paper uses the data of large samples with national representativeness to investigate the problem of family financial exclusion in China,and the research conclusions will be more accurate and systematically representative.Moreover,this paper innovatively uses the financial patent data from the State Intellectual Property Office of China,and uses the number of financial patents in each province as the measurement of the province-level financial innovation level,which is original.