IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0240114.html
   My bibliography  Save this article

Financialization, religion, and social trust in rural China

Author

Listed:
  • Wei Yin
  • Berna Kirkulak-Uludag
  • Kent Matthews

Abstract

This paper examines the impact of financial development and religion on social trust in rural China. We use multinomial logistic regression models with the Chinese Household Income Project (CHIP) Survey Data of 2013. The findings show that while financial development has a negative and significant impact on particular trust but no impact on general trust, religion has a positive relationship with general trust but insignificant relationship with particular trust. This study further investigates the impact of interaction between financial development and religion on social trust. The joint effect of financial development and religion has significant and positive relationship with particular trust. This implies that while financialization destroys the traditional relatives and friends trust based on lending and borrowing in rural area, religiosity lessens the negative impact of financialization on particular trust.

Suggested Citation

  • Wei Yin & Berna Kirkulak-Uludag & Kent Matthews, 2020. "Financialization, religion, and social trust in rural China," PLOS ONE, Public Library of Science, vol. 15(10), pages 1-18, October.
    • Handle: RePEc:plo:pone00:0240114
    DOI: 10.1371/journal.pone.0240114
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0240114
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0240114&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0240114?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
    ---><---

    References listed on IDEAS

    as
    1. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
    2. Ernst Fehr, 2009. "On The Economics and Biology of Trust," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 235-266, 04-05.
    3. La Porta, Rafael & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997. "Legal Determinants of External Finance," Journal of Finance, American Finance Association, vol. 52(3), pages 1131-1150, July.
    4. 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.
    5. Stulz, Rene M. & Williamson, Rohan, 2003. "Culture, openness, and finance," Journal of Financial Economics, Elsevier, vol. 70(3), pages 313-349, December.
    6. Alesina, Alberto & La Ferrara, Eliana, 2002. "Who trusts others?," Journal of Public Economics, Elsevier, vol. 85(2), pages 207-234, August.
    7. Asli Demeirgüç-Kunt & Ross Levine (ed.), 0. "Finance and Growth," Books, Edward Elgar Publishing, number 17119.
    8. Christian Bjørnskov, 2007. "Determinants of generalized trust: A cross-country comparison," Public Choice, Springer, vol. 130(1), pages 1-21, January.
    9. Tobin, Damian & Volz, Ulrich, 2018. "The Development and Transformation of the People’s Republic of China’s Financial System," ADBI Working Papers 825, Asian Development Bank Institute.
    10. Guglielmo Barone & Sauro Mocetti, 2016. "Inequality And Trust: New Evidence From Panel Data," Economic Inquiry, Western Economic Association International, vol. 54(2), pages 794-809, April.
    11. Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 2003. "Law and finance: why does legal origin matter?," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 653-675, December.
    12. Turvey, Calum G. & Kong, Rong, 2010. "Informal lending amongst friends and relatives: Can microcredit compete in rural China?," China Economic Review, Elsevier, vol. 21(4), pages 544-556, December.
    13. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2004. "The Role of Social Capital in Financial Development," American Economic Review, American Economic Association, vol. 94(3), pages 526-556, June.
    14. Maryam Dilmaghani, 2017. "Religiosity and social trust: evidence from Canada," Review of Social Economy, Taylor & Francis Journals, vol. 75(1), pages 49-75, January.
    15. 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.
    16. Chunfang Cao & Kam C. Chan & Wenxuan Hou & Fansheng Jia, 2019. "Does religion matter to informal finance? Evidence from trade credit in China," Regional Studies, Taylor & Francis Journals, vol. 53(10), pages 1410-1420, October.
    17. Zhong, Hai, 2011. "The impact of population aging on income inequality in developing countries: Evidence from rural China," China Economic Review, Elsevier, vol. 22(1), pages 98-107, March.
    18. Berggren, Niclas & Bjørnskov, Christian, 2011. "Is the importance of religion in daily life related to social trust? Cross-country and cross-state comparisons," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 459-480.
    19. Elgar, F.J., 2010. "Income inequality, trust, and population health in 33 countries," American Journal of Public Health, American Public Health Association, vol. 100(11), pages 2311-2315.
    20. Niu, Geng & Zhao, Guochang, 2018. "Religion and trust in strangers among China's rural-urban migrants," China Economic Review, Elsevier, vol. 50(C), pages 265-272.
    21. Elvin Afandi & Nazim Habibov, 2016. "Social trust and use of banking services across households in 28 transitional countries," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 43(4), pages 431-443, April.
    22. Mislin, Alexandra & Williams, Lisa V. & Shaughnessy, Brooke A., 2015. "Motivating trust: Can mood and incentives increase interpersonal trust?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 58(C), pages 11-19.
    23. Sjoerd Beugelsdijk & Henri L.F. de Groot & Anton B.T.M. van Schaik, 2004. "Trust and economic growth: a robustness analysis," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 118-134, January.
    24. Calderon, Cesar & Chong, Alberto & Galindo, Arturo, 2002. "Development and Efficiency of the Financial Sector and Links with Trust: Cross-Country Evidence," Economic Development and Cultural Change, University of Chicago Press, vol. 51(1), pages 189-204, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Putri Aliah Mohd Hidzir & Shafinar Ismail & Sharifah Heryati Syed Nor & Aqilah Nadiah Md Sahiq, 2024. "The Impact of Social Trust, Social Network and Financial Innovation on the Financial Well-Being of Micro-Entrepreneurs in Malaysia: A Pilot Study," Information Management and Business Review, AMH International, vol. 16(1), pages 137-146.
    2. Gu, Leilei & Liu, Zhongyang & Ma, Sichao & Wang, Hongyu, 2022. "Social trust and corporate financial asset holdings: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 82(C).

    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. Badaoui, Eliane, 2023. "Which dimensions of religiosity matter for trust? New insights from the MENA region," World Development, Elsevier, vol. 167(C).
    2. Cline, Brandon N. & Williamson, Claudia R., 2016. "Trust and the regulation of corporate self-dealing," Journal of Corporate Finance, Elsevier, vol. 41(C), pages 572-590.
    3. Méon, Pierre-Guillaume & Sekkat, Khalid, 2015. "The formal and informal institutional framework of capital accumulation," Journal of Comparative Economics, Elsevier, vol. 43(3), pages 754-771.
    4. Paul Brockman & Sadok El Ghoul & Omrane Guedhami & Ying Zheng, 2022. "Does social trust affect international contracting? Evidence from foreign bond covenants," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(6), pages 1011-1044, August.
    5. Ali Recayi Ogcem & Ruth Tacneng & Amine Tarazi, 2021. "Trust and Financial Development: Forms of Trust and Ethnic Fractionalization Matter," Working Papers hal-03322592, HAL.
    6. Thorsten Beck & Ross Levine, 2008. "Legal Institutions and Financial Development," Springer Books, in: Claude Ménard & Mary M. Shirley (ed.), Handbook of New Institutional Economics, chapter 11, pages 251-278, Springer.
    7. Paul Brockman & Sadok El Ghoul & Omrane Guedhami & Ying Zheng, 0. "Does social trust affect international contracting? Evidence from foreign bond covenants," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-34.
    8. Quentin Dupont & Jonathan M. Karpoff, 2020. "The Trust Triangle: Laws, Reputation, and Culture in Empirical Finance Research," Journal of Business Ethics, Springer, vol. 163(2), pages 217-238, May.
    9. M. Niaz Asadullah, 2017. "Who Trusts Others? Community and Individual Determinants of Social Capital in a Low-Income Country," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(2), pages 515-544.
    10. Berggren, Niclas & Bjørnskov, Christian, 2011. "Is the importance of religion in daily life related to social trust? Cross-country and cross-state comparisons," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 459-480.
    11. Elvin Afandi & Nazim Habibov, 2016. "Social trust and use of banking services across households in 28 transitional countries," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 43(4), pages 431-443, April.
    12. Mikucka, Malgorzata & Sarracino, Francesco & Dubrow, Joshua K., 2017. "When Does Economic Growth Improve Life Satisfaction? Multilevel Analysis of the Roles of Social Trust and Income Inequality in 46 Countries, 1981–2012," World Development, Elsevier, vol. 93(C), pages 447-459.
    13. Sabatini, Fabio, 2006. "The Empirics of Social Capital and Economic Development: A Critical Perspective," Knowledge, Technology, Human Capital Working Papers 12097, Fondazione Eni Enrico Mattei (FEEM).
    14. Djankov, Simeon & McLiesh, Caralee & Shleifer, Andrei, 2007. "Private credit in 129 countries," Journal of Financial Economics, Elsevier, vol. 84(2), pages 299-329, May.
    15. Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 2003. "Law, endowments, and finance," Journal of Financial Economics, Elsevier, vol. 70(2), pages 137-181, November.
    16. Matthias Bürker & G. Alfredo Minerva, 2014. "Civic capital and the size distribution of plants: short-run dynamics and long-run equilibrium," Journal of Economic Geography, Oxford University Press, vol. 14(4), pages 797-847.
    17. Antonio C. David & Carmen A. Li, 2010. "Exploring the links between HIV|AIDS, social capital and development," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(7), pages 941-961.
    18. Andrei Shleifer & Florencio Lopez-de-Silanes & Rafael La Porta, 2008. "The Economic Consequences of Legal Origins," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 285-332, June.
    19. James B. Ang, 2019. "Culture, Legal Origins, And Financial Development," Economic Inquiry, Western Economic Association International, vol. 57(2), pages 1016-1037, April.
    20. Gur Aminadav & Elias Papaioannou, 2020. "Corporate Control around the World," Journal of Finance, American Finance Association, vol. 75(3), pages 1191-1246, June.

    More about this item

    Statistics

    Access and download statistics

    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:plo:pone00:0240114. 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: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    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.