Credit Constraints and Household Selection of Financial Assets

摘要

Based on the micro-data of China Household Finance Survey, this paper analyzes the effects of credit constraints on household selection of financial assets empirically. The results show that credit constraints have the significant negative impact on participation rate and allocation ratio of savings, stock, risky financial assets. Credit constraints keep families from holding much savings. Those families who face credit constraints have to use their own money to meet the demand of funds without bank loans. Those families who face credit constraints are no willing to invest in stock market and hold less risky assets because of their lower risk tolerance. Besides, credit constraints can increase the participation rate of informal borrowing and reduce household private lending. There are few domestic articles analyzing the relationship between credit constraints and household selection of financial assets. Therefore, this paper can be more of reference value for the follow-up study. Meanwhile, the results show that reducing credit constraints is helpful for the household participation in capital market.