PLoS ONE (Jan 2024)

The neighborhood effects on the online financial investment of rural households: Evidence from China.

  • Wenxian Li,
  • Kefei Han,
  • Zhenyu Lao,
  • Yuyuan Chen

DOI
https://doi.org/10.1371/journal.pone.0296972
Journal volume & issue
Vol. 19, no. 3
p. e0296972

Abstract

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Neighborhood effects are a common strategy for rural households to deal with irrational situations such as deficient information and ability. Based on the 2019 CHFS survey data, we designed a Probit model to verify whether neighborhood effects exist in the online financial investment of rural households. Our paper constructs a multiple mediation model to explore its mechanism. Otherwise, we execute the heterogeneity analysis by dividing the total sample into groups. Our paper proved that (1) Rural households have significant neighborhood effects on online financial investment. (2) Heterogeneity analysis shows that neighborhood effects are stronger among women, the younger, low-education, and low-income rural households. (3) Through the multiple mediation model, we proved that the neighborhood effects on online financial investment of the peasant household work by the financial knowledge spillover and risk-taking enhancement. Our study conduces to a better understanding of the financial decision-making of rural households, which may provide a practical implication for the popularization of new financial products and the optimal design of policy interventions.