| As the structural reform on the supply side of finance continues to deepen,financial support from various financial institutions in the financial market is needed to meet the diversified needs of residents and families and thus increase the level of well-being.An individual’s well-being is multi-faceted,and an important part is financial well-being.Studies have shown that beneficial financial behaviors can enhance financial well-being,so optimizing household financial behaviors constitutes an important element in improving the individuals’ financial well-being.Promoting household healthy financial behavior decisions by financial support and effectively enhancing their financial well-being is a significant policy point to promote financial development and,more importantly,to achieve overall social wellbeing.Regarding the optimization of financial behavior in the household sector,some scholars focus on the positive impact of regional financial development on household financial behavior,while others focus on the important role played by micro factors within households in optimizing financial behavior.There is still less research on the combined effect of credit support provided by financial institutions and intra-household characteristics on household financial behavior in the context of regional financial development.This paper takes households and individuals in the 2013-2017 China Household Financial Survey(CHFS)by the China Household Financial Survey and Research Centre of Southwest University of Finance and Economics as the research object,and divides households’ financial behavior into consumption behavior and asset allocation behavior.Taking household-oriented credit support and residents’ financial capability as the entry point,and taking consumption upgrading and asset allocation optimization as the landing point,this paper analyzes the key role played by credit support and residents’ financial capability in promoting consumption upgrading and optimizing asset allocation by constructing residents’ financial capability indicator,taking into account the actual situation of China’s economic development.The article firstly presents the main research hypotheses based on a review of the underlying theory and related literature,and secondly measures the credit support provided by financial institutions to households and the residents’ financial capability in order to explore their impact on consumption behavior and asset allocation behavior.Under the important financial system of financial inclusion,credit support becomes an external force to alleviate credit constraints,while the residents’ financial capability becomes an important internal driver to optimize financial behavior.Financial education services to resident providing by financial institutions play a role in enhancing residents’ financial capability,which helps to enrich the connotation of financial inclusion and extend the outreach of financial inclusion.The synergy between credit support and financial capability is reflected in the way and mechanism in which they act to promote consumption upgrading and optimize asset allocation.In the empirical analysis section,firstly,the feasible paths for households to achieve consumption upgrading in urban and rural areas and in different regions are explored under the relaxation of credit constraints,using quantile regressions of panel data,while the mechanisms by which residents’ financial capability promotes household consumption are analysed.Secondly,households’ assets are classified into physical and financial assets according to their liquidity,after which financial assets are classified into growth financial asset and survival security financial asset according to their financial needs.A two-way fixed effects model with panel data is used to explore the ways in which households optimize their asset allocation in urban and rural areas and across regions.Next,based on the above analysis of household categorised consumption and asset allocation,Fisher Permutation Tests using self-help sampling approach present significant effect differences between the Eastern and Central regions,the Central and Western regions and the Eastern and Western regions,as well as showing the impact differences between urban and rural areas in each of the three regions.Finally,the reasons for inter-regional and urban-rural differences are analysed in terms of real estate financial policies for the household sector and the property assets value owned by households,together with internal household characteristics such as the educational level of the head of household,and the reasons for the differences in financial behavior influenced by credit support and financial capability between the three regions and between urban and rural areas are verified on the basis of available statistical information and actual household demographic characteristics.The main findings of this paper can be summarised in the following four points.First,based on the introduction of household credit constraints,the positive relation between credit and consumption when households are not subject to credit constraints is verified.Next,the impact of financial institutions’ household-oriented credit support and residents’ financial capability on categorical consumption and the mechanisms by which financial capability promotes household consumption are explored.Both household leverage and resident financial capability have a significant positive effect on total consumption and quality consumption,when households’ total and quality consumption are at different levels.Importantly,when quality consumption and total consumption are in the same decile respectively,the leverage ratio has a greater effect on quality consumption than total consumption,and when total household consumption and quality consumption are at low to medium levels,the residents’ financial capability has a greater effect on quality consumption than total consumption.In summary,when households are at different levels of consumption,credit support for households and the residents’ financial capability can promote total consumption,especially quality consumption within total consumption.Therefore,credit support from financial institutions for households and the increase in financial capability of residents will contribute to the households’ consumption upgrading,while increasing the level of total consumption.Second,the effects of financial institutions’ credit support to households and residents’ financial capability on the household’s disaggregated assets share are as follows: household leverage is significantly positive for the physical assets share,while it has a negative effect on the growth and survival security financial assets share.In contrast,residents’ financial capability has a significant negative effect on the physical assets share and a significant positive effect on the both types of financial assets share.In other words,household-oriented credit support helps to promote the allocation of physical assets,while financial capability is more effective in increasing the allocation of both types of financial assets than the role of credit support,satisfying households’ higher quality investment needs and promoting wealth accumulation.Third,a Fisher Permutation Test using a self-help sampling method analyses the regional and urban-rural differences in the effects of households’ credit support and residents’ financial capability on categorised consumption and asset shares,and finds that there are significant regional and urban-rural differences in the effects of credit support and residents’ financial capability on quality consumption at a certain level of quality consumption,and similarly,there are significant regional and urban-rural differences in their effects on categorised asset shares.Fourth,an analysis of the reasons for the inter-regional and urban-rural impact differences reveals that the value of households’ property assets can partially explain the differences between the eastern,central and western regions,while the education level of the head of households can partially explain the urban-rural differences.Therefore,measures to promote household consumption upgrading and optimize asset allocation should take into account the financial situation of households in terms of property assets and other assets between regions,as well as the individual characteristics of urban and rural residents,such as the education level of the head of households,so as to reduce the differences between regions and urban and rural households in terms of consumption levels and wealth accumulation resulting from asset allocation,and to help promote shared prosperity.The innovations of this research paper are mainly reflected in the following aspects.Firstly,China is a vast country,and there are important differences between regions in terms of economic development levels,cultural customs and social ideologies,so it is necessary to conduct differentiated research on different regions of China.In analysing the impact of credit support and residents’ financial capability on consumption behavior,China is divided into three regions according to administrative divisions,and the consumption effects of households in each region are explored separately,on the basis of which whether there are significant inter-regional differences in such effects are tested,and the internal reasons for the differences are further analysed from the perspective of household characteristics,providing empirical support for the study of regional differentiation in promoting consumption upgrading.In addition,when it comes to the impact of credit support and residents’ financial capability on the allocation of categorical assets,it also examines the specific manifestations of regional differences and analyses the possible reasons of the differences,which is an important complement to the existing studies.Secondly,on the basis of exploring the influence of residents’ financial capability on consumption behavior,the mechanism of the role of residents’ financial capability in promoting household categorical consumption is elaborated,not only considering the role of households’ formal indebtedness and wealth,but also analysing the influence of residents’ financial capability on kinship in social capital,expanding the path of the role of consumption behavior research.Thirdly,financial institutions’ credit support for households and residents’ financial capability play a synergistic role in optimizing households’ financial behavior,while financial education services by financial institutions enhance residents’ financial capability,enrich the connotation of financial inclusion and extend the outreach of financial inclusion.This paper explores for the first time the key role of the interaction between household-oriented credit support and financial education in financial services on consumption and asset allocation behavior.In terms of promoting household consumption upgrading,credit support for rural households and financial education for urban households are more effective,and credit support and financial education for households in western region are more effective than those in eastern and central regions;in terms of optimizing asset allocation,credit support is more effective for households’ physical asset allocation,and for growth and survival security financial asset allocation,cultivating their financial capability is more effective for urban households and households in the eastern region.For households,the findings of this paper help guide them to rationalise their consumption choices and asset allocation planning through moderate borrowing and the development of their financial capability within their ability to pay,so as to achieve the goals of consumption upgrading and optimal asset allocation.For financial institutions,it further helps them understand the credit and financial education needs of various types of households,promote innovations in credit instruments,design financial products that better meet customers’ needs,and implement financial education that is tailored to individual characteristics,enhancing the matching degree to which financial innovation supports consumption and asset allocation.Considering that many of the financial support policies to optimize the consumption and asset allocation of households are regional and local policies,and the local policies themselves are aimed at the residents and households in the region.Therefore,for relevant government departments,understanding the differences in the effectiveness of financial support policies in different regions can help promote local financial support policies to serve households’ consumption upgrading and asset allocation optimization in a more efficient and targeted manner. |
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