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Financial Availability, Income Gap And Household Consumption Rate In Transitional China: A Theoretical Approach And Empirical Test

Author

Listed:
  • NIANZHI GUO

    (Newhuadu Business School, Minjiang University, P. R. China)

  • HAI-TAO TSAO

    (School of Economics and Management, Minjiang University, P. R. China)

  • DI ZHAO

    (��School of Economics and Management, Xiamen University of Technology, P. R. China)

Abstract

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†.

Suggested Citation

  • Nianzhi Guo & Hai-Tao Tsao & Di Zhao, 2025. "Financial Availability, Income Gap And Household Consumption Rate In Transitional China: A Theoretical Approach And Empirical Test," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 70(02), pages 303-323, March.
    • Handle: RePEc:wsi:serxxx:v:70:y:2025:i:02:n:s0217590821500247
    DOI: 10.1142/S0217590821500247
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    More about this item

    Keywords

    Financial exclusion; financial availability; income gap; household consumption rate; China;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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