Abstract:
Using the number and capital of microcredit companies to measure the development of informal finance in the macro-level and dialect diversity to measure culture diversity, this paper examines the effects of cultural diversity on the development of informal finance. The results show that the dialect diversity has a significant negative effect on the number and capital of microcredit companies. The mechanism is that cultural identity and the social capital, which are represented by dialect, help to mitigate private lending transaction costs and default risks. We further use the performance of 438 microcredit companies in Shandong Province to measure the development of informal finance in micro-level and find that the dialect diversity reduces the profitability and loan size, but increases the operating risks. This provides the micro foundation for the effects of cultural diversity on the development of informal finance in macro-level.
张博, 范辰辰. 文化多样性与民间金融:基于方言视角的经验研究[J]. 金融研究, 2018, 457(7): 69-89.
ZHANG Bo, FAN Chenchen. Cultural Diversity and Informal Finance:Empirical Research from the Perspective of Dialect. Journal of Financial Research, 2018, 457(7): 69-89.
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