Research On The Influence Of Consumer Finance On Urban Residents’ Consumption Behavior In Our Country

As one of the “troika” to stimulate economic growth, consumption has an important basic effect to economic growth. Since the financial crisis in 2008, our country has deeply understood the disadvantages of over-reliance on investment and export, thus the development strategy of expanding domestic demand and promoting consumption has been put forward. At the same time, in the “New Normal” periods, the strategy of supply-front structural reform has been put forward, and consumption has been put in the level of a new engine in Chinese economy development. The adjustment and upgrading of industry can be achieved by promoting consumption upgrading, and new consumption hot spots can be fostered by innovating and increasing supply. Thus we can form a new supply power and economic growth power driven by consumption. As an important channel to promote consumption, consumer finance’s development has also gained attention. Banks, e-commerce, enterprises and other entities are competing for distributing consumer finance market. Consumer finance corporations and scenario consumption products are emerging one after another, enriching the consumer finance market greatly. Based on this, it is important and necessary to correctly understand the influencing mechanism and the influencing degree of consumer finance on residents’ consumption behavior.For the purpose of “comprehensively analyzing the connotation of consumer finance, scientifically grasping the influencing mechanism of consumer finance on residents’ consumption behavior and thus mining consumption potential”, this dissertation follows the research agenda of theoretical basis, mechanism analysis, practical investigation, empirical analysis and policy recommendations. In theory, the dissertation defines the connotation of consumer finance and specify the influencing mechanism of consumer finance on residents’ consumption behavior. By investigating the development history, present situation and characteristics of all kinds of consumer financial instruments and urban residents’ consumption behavior in our country, the dissertation proposes the theoretical assumptions of consumer finance influencing on people’s behavior. Through collecting macro and micro data and using models of time series, panel series, linear and nonlinear, the dissertation empirically inspects the science of three mechanisms. In addition, combing with theoretical analysis and the reality of our country, it suggests some policy recommendations for the development of consumer finance to facilitate consumption.The start and basis of this dissertation is to define the consumer finance. Through presenting definitions about consumer finance in academy and learn from Tufano’s function view, this dissertation points out that consumer finance is about all kinds of financial activities related to consumption, which has the function of payment, risk management, saving and investment. Specifically, it includes the consumption payments via medium such as bankcards, the risk managements via insurance, the investment consumption such as personal financial investment, and so on. The goal of consumer finance is to facilitate and sustain consumption.On account of the functional connotation of consumer finance, the dissertation constructs a new logic analyzing frame of consumer finance on people’s consumption behavior. Through analyzing every influencing path by the representative financial instrument on people’s consumption behavior in each function block, the dissertation re-inducts and refines three mechanisms: smoothing mechanism, security mechanism and the value-added mechanism. Among them, the smoothing mechanism consists of budget smooth via consumer credit and the payment smooth via bankcards. The security mechanism includes self-protection via savings and commercial security via insurance. The value-added mechanism is realizing through wealth effect and income effect caused by financial investment. Meanwhile, by investigating the development history, present situation and characteristics of consumer finance and residents’ consumption behavior, it proposes theoretical assumptions of consumer finance’s influence on people’s consumption behavior, that is consumer finance can promoting people’s consumption level and optimize consumption structure through three mechanisms.Moreover, the empirical results have verified the existence of three mechanisms of consumer finance influence on our country’s rural residents’ consumption behavior, which supports the theoretical assumptions. The inspection of budget smooth mechanism is accomplished by choosing consumer credit as the representative financial tool and using the two stage least square regression, whose results show that consumer credit can promote rural residents’ consumption level and optimize consumption structure significantly. As to the payment mechanism, it chooses bankcard as the representative variable and uses the co-integration and errorcorrection-model(ECM), showing that bankcards have significant promoting effect on residents’ expenditure, moreover, credit cards’ promoting effect is much stronger than that of the whole bankcards, which is due to double functions of credit cards’, saying payment smoothing and credit function. The self-security mechanism’s inspection is realized by choosing saving as independent variable. The results of panel data model indicate that saving has double effects on residents’ expenditure, it can strengthen consumers’ confidence and prevent liquidity constraints and the former is more evident. The commercial security mechanism’s inspection is based on the representative financial instrument of insurance and the dissertation tries to construct a smoothing transition model to comprehensively investigate the linear and nonlinear effect of insurance on residents’ consumption. The result shows that the whole insurance has both linear and nonlinear promoting effect on urban residents’ expenditure, so does the life insurance. However, the property insurance inhibits urban residents’ consumption and its effect lags. The value-added mechanism’s inspection is realized based on micro datum. From the aspect of whether to invest on financial products or not, the urban residents who have made financial investments consumes more than those who haven’t made any financial investments, and their probability density curve’s kurtosis and skewness are much smaller, showing that these urban residents have higher expenditure level in a larger range. From the aspect of residents’ attitude to investment, the more radical of residents’ attitude, the higher of their expenditure. From the aspect of the quantile regression of investment to residents’ consumption level and consumption structure, the higher of residents’ expenditure, the stronger affection of investment despite the highest level. What’s more, financial investment has significant influence on nondurable goods and service expenditure.At last, based on the above analysis, this dissertation finally proposes some policy advice from three aspects of macro, medium and micro, which corresponds to the government, the market and residents respectively. In the macro level, the residents’ income source and distribution should be optimized, the social security system should be completed and the consumer protection system should be strengthened. In the medium level, the saving market needs innovation, the payment market needs to be integrated, the credit market should be extended, the insurance market needs to be upgraded and the capital market should be completed. In the micro level, it suggests to strengthen the financial education of residents and make them set up the concept of harmonious consumption. Therefore, it can create a good environment for the development of consumer finance; give full use of its function to promote urban residents’ consumption, thus increasing the contribution of consumption to the economic growth of in the new normal.