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Consumption behavior of Chinese urban residents during economic transition : Intermittent and cyclical fluctuations

Xiaotong Jin (School of Business, Jilin University, Jilin, China)
Shengliang Deng (Faculty of Business, Brock University, St Catharines, Canada Huazhong Agricultural University, Wuhan, China)
Ilan Alon (China Center, Rollins College, Winter Park, Florida, USA Harvard University, Cambridge, Massachusetts, USA)

International Journal of Emerging Markets

ISSN: 1746-8809

Article publication date: 5 July 2011

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Abstract

Purpose

The paper aims to examine the consumption behavior of Chinese residents during economic transition. It explores whether Western theories of consumption are applicable to the Chinese situation, and then tests the hypothesis based on Chinese traditional culture and dynamic nature of system change.

Design/methodology/approach

The paper opted for an empirical‐based approach. A regression model was used to analyze annual consumption data from 1986 to 2008 in China.

Findings

The paper provides empirical insights and suggests that under the influence of Chinese traditional culture and dynamic change of the Chinese economic system, Chinese urban residents exhibit a special consumption pattern of an intermittent and cyclical nature.

Research limitations/implications

The paper concludes that in order to make the consumption stimulation policy in China more effective, it is necessary to establish a series of measures such as establishing a sound social welfare system as well as narrowing the gap between the rich and the poor, which will substantially increase the buying power of the less‐privileged groups and thus will increase the overall spending in the society. Although the econometric model used in this paper is adequate, a different approach like time series econometrics may give us additional insights. Researchers are encouraged to test the hypothesis further by employing other methodologies. Second, due to the lack of its own theories in the emerging market, this study remains exploratory.

Originality/value

This paper fulfils an identified need to study the special consumption behavior of Chinese urban residents during the economic transition.

Keywords

Citation

Jin, X., Deng, S. and Alon, I. (2011), "Consumption behavior of Chinese urban residents during economic transition : Intermittent and cyclical fluctuations", International Journal of Emerging Markets, Vol. 6 No. 3, pp. 187-199. https://doi.org/10.1108/17468801111144030

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited