Paula Cruz-García (p), Jesús Peiró-Palomino

María Del Carmen Dircio Palacios Macedo

The restructuring process of the Spanish banking sector initiated after the Great Recession of 2008 has led to a dramatic reduction in the number of bank branches. This paper analyzes the impact of branch closures on GDP per capita, labor productivity and employment per capita of the Spanish provinces in the period 2008–2018. The results show that bank branches have only a weak impact on employment, but no effect on productivity and GDP per capita. Therefore, if consumption and investment decisions of families and firms are affected by branch closures, the impact is not transferred to aggregate regional performance.

Mofei Jia (p)

Paula Cruz-García

The credit card debt puzzle (CCDP) refers to the behavior that consumers simultaneously hold high-cost credit and low-yield liquid assets, which brings individuals a substantial amount of unnecessary interest cost. Most empirical studies focus on western countries, where people have the tendency to overspend and do not save too much. Limit studies consider Chinese financial markets, and they mainly used existent datasets in which the definition of revolving debts seems ambiguous in some cases. Therefore, in this paper, we first identify whether the CCDP exists in Chinese financial markets, and then investigate the possible explanations for the CCDP if exists.
In the paper, we conduct an online survey in which we clarified the potential ambiguity of revolving debts, i.e., excluding debts in interest-free periods. Furthermore, considering the typical feature in Chinese financial markets, i.e., the prevalence of third-party credit platforms like Huabei, we extended the definition of “credit card debt” by including debts in third-party credit platforms. Moreover, in the survey, we consider potential explanations as listed in the literature: e.g., precautionary liquidity demand, strategic bankruptcy, financial literacy, and etc.
By conducting Wilcoxon signed-rank test, no significant difference is detected between the debts from the usage of credit cards and via third-party credit platforms, therefore, we extend the definition of involving debts by including data on third-party credit platforms. In our data set, around 25% credit card holders have a credit card balance not paid in full, and more than 75% of them simultaneously have savings in current account balance.
After controlling factors like age, gender, education, work, etc., as shown in logistic regressions, the probability of being involved in the puzzle is positively affected by individual’s precautionary liquidity demand, implements of bankruptcy law, and habits of investment and repayment. Moreover, individual’s financial literacy level decreases the probability of having this puzzle. The results hold under a robust test by including individuals’ time deposits.

María Del Carmen Dircio Palacios Macedo (p), Paula Cruz, Emili Tortosa Ausina (p), Fausto Hernández Trillo

Mofei Jia

Access to financial services varies sharply around the world. In many countries less than
half the population has an account with a financial institution, and this lack of access to finance
is often the critical mechanism for generating income inequality and uneven growth. This is the
case of Mexico, where financial exclusion has often been a critical issue for large shares of the
population—mainly in rural and poorer localities. This is an abiding concern for policymakers,
given how it thwarts socioeconomic opportunities to families and business alike, hampering economic
growth and development. However, evaluating how relevant the issue is requires a careful
measurement of financial inclusion which, up to now, has been achieved to a limited extent. We
contribute to this literature and in this context by proposing a series of multivariate indices of
financial inclusion for Mexico, at the municipal level for the period 2013-2021. The indices
encompass different dimensions, including access, and usage, according to what is considered
theoretically in the literature, but have been barely considered for the Mexican case. The results
indicate that the shares of unbanked population are still large, although it is unevenly distributed
in space.