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Mobile payment adoption and the decline in China’s household savings rate

Author

Listed:
  • Jianmei Zhao

    (Central University of Finance and Economics)

  • Lele Zhao

    (Central University of Finance and Economics)

Abstract

This paper examines the effects of mobile payment (m-payment) adoption on household savings decline in China. Using data from the 2017 China Household Finance Survey, we employ an instrumental variable approach with multiple robustness checks to evaluate the impact of m-payment adoption on household savings rate. Our study discovers that m-payment usage decreases the household savings rate by about 20% points. We also find that, relative to that of rural and older households, the savings of urban and younger households are more significantly influenced by m-payment adoption. The main channels through which m-payment usage affects the household saving rate likely include improved risk sharing, alleviated credit constraint, and enhanced risk tolerance. This paper provides important insights about m-payment adoption and the ongoing household savings decline in China.

Suggested Citation

  • Jianmei Zhao & Lele Zhao, 2022. "Mobile payment adoption and the decline in China’s household savings rate," Empirical Economics, Springer, vol. 63(5), pages 2513-2537, November.
    • Handle: RePEc:spr:empeco:v:63:y:2022:i:5:d:10.1007_s00181-022-02212-w
    DOI: 10.1007/s00181-022-02212-w
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    More about this item

    Keywords

    Mobile payment (M-payment); Household savings; Risk-sharing; Credit constraint; Risk tolerance; China;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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