Can land transfer relax credit constraints? Evidence from China

Although many studies have examined what drives credit constraints and their negative impact, evidence on the mechanism of relaxing is scarce. This paper explores effective solutions to help households improve access credit. Using China Family Panel Studies data from 2018, we employ an endogenous switching probit model examine whether extent land transfer can ease constraints. We find that in or out are, respectively, 31.4% 21.4% less constrained than those do not. Participation transfers borrowers’ financial situations through income increases pledging assets as collateral, alleviating both formal informal Our results suggest any government initiatives promote efficiency boost economic growth China.