Inclusive Finance Credit Behaviours and Income Inequality: Matter of Social Capital?

Abstract

A large body of evidences found that social capital contributed to credit constraints and welfares. However, we link villagers and households samples across China and account for multi-dimension social capital measurement error through seemly-unrelated three-stage least squares. We show that individual social capital, an individual comparative advantages resource, adversely affected credit behaviours and income distributions. To assessment the importance of community social capital for poor households, we address endogenous by instruments variables quantile regression. Then find that the external human capital mechanism of community social capital improves income and credit access. Update evaluation implies that social capital is not always favorable to income equality and credit access.