Public pension and borrowing behavior: evidence from rural China

PurposeThe purpose of this paper is to investigate how China's rural public pension affects farmers' formal borrowing, which has always been rationed.Design/methodology/approachThis paper uses a difference-in-difference (DID) estimation to evaluate the effect of the implementation of the New Rural Pension Scheme (NRPS) at the end of 2009 on farmers' formal borrowing.FindingsThe results show that the NRPS significantly reduces farmers' formal borrowing from rural credit cooperatives (RCCs). The effect is significant among the elderly, eastern China and high-income groups.Originality/valueThis study contributes to the literature by identifying another potential reason for rural formal credit shortage. Policymakers and rural formal financial institutions should consider the demand side problem of lending.

Rural credit cooperatives’ contribution to agricultural growth: evidence from China

PurposeRural credit cooperatives (RCCs) have long dominated China’s rural credit market and met most of agricultural credit demands while the existing literature seldom examines their contribution to agricultural sector. The purpose of this paper is to provide empirical evidence on the contribution of RCCs to agricultural growth, using China’s provincial panel data from 1997 to 2014.Design/methodology/approachBoth static fixed effects models and two-step generalized method of moment dynamic panel data models, which control the endogeneity, are employed to identify the causality from RCC credit to agricultural growth in China.FindingsThe results show that the credit from RCCs increases the agricultural output significantly. A 1 percent increase in RCC credit leads to agricultural growth of about 0.08 percent, which is robust to various empirical specifications. Further study shows that the contribution of RCC credit to agricultural growth decreases from the most developed eastern region to the least developed western region and increases over time.Research limitations/implicationsThe results imply that RCC credit is critical in financing agricultural activities by relaxing rural credit constraints and intense competition strengthens the contribution of RCCs to agricultural growth by improving managerial efficiency and developing diversified financial products to meet better rural credit demands.Originality/valueTo the authors’ knowledge, this is first empirical study on the effect of RCC credit on agricultural growth despite of many on the role of financial development in agricultural growth.

Accountability by the accountable self: The case of Leone Wollemborg

The accounting history literature has mostly concentrated on depicting how accountability practices evolve with respect to the organisational and social contexts, leaving at the margins explorations of the role of the ‘accountable self’ in this process. To extend this literature, the present study examines how the economist and landowner Leone Wollemborg (1859–1932) acted as an ‘accountable self’, explaining his own actions to the ‘other’, to promote a new organisational model aimed at solving the credit issue affecting the rural population. Based on archival material, the article explores Wollemborg’s biography and develops a content analysis of his discourses. The findings show that, by making a pervasive use of face-to-face narrative accountability, Wollemborg obtained trust and engagement of external potential stakeholders, thus expanding the rural credit cooperatives (Raiffeisen-style). This research facilitates understanding of the relevance for the initiator of a new organisational model to act as an ‘accountable self’.

JOT-CREDIT PROBLEMS OF RURAL CREDIT COOPERATIVE AND SUGGESTIONS: THE CASE OF XIN LE COUNTRY, SHIJIAZHUANG CITY, HEBEIPROVINCE, CHINA

The rural credit cooperative is an important part of financial system in China. The jot credit provided by rural credit cooperative serves as an important financial tool for its members. The reformation of rural credit cooperatives on 2014 has further strengthened the important of jot credit in Hebei province, China. However, there are problems in the jot credit as shown by the increasing income gap between the rich and poor. This warrants a study to unveil the problem of rural credit cooperative’s jot credit and suggestions to improve the jot credit. Using the case of Xin le Shijiazhuang, Hebei province, this paper aims to explore the rural credit cooperative’s jot credit problem and suggest potential solutions. Results reveal that there are high demand for loan among the peasants. However, the tedious application procedure, rigidity in the duration and terms of loan, are the problems that discouraging jot credit usage among the peasants. It is suggested that the scope of service, duration and terms of loan to be expanded to meet the diverse needs of peasants. In addition, the nimble rate should be implemented on the jot credit by stages. The jot credit is the new direction of the credit business development. Peasants have high enthusiasm in repayment and the non-performing loan is in a downward trend. Meanwhile the jot credit, to certain extent, still has some problems to be tackled.Keywords: Rural Credit Cooperative; Jot-Credit Problems; Xin Le Country.