Can Online Social Network Promote Residents’ Consumption —Proven by the Micro Data from 27,632 Chinese Households

Our research aim is to analyze the impact of rural and urban households’ online social network on their daily consumption, and tests the most important transmission mechanism—credit constraint mechanism in it, and we use the micro data sample of China Household tracking survey (CFPS) to achieve it. Furthermore, we compare the impact of formal finance and informal finance on household consumption’s differences in response. The conclusion shows that: 1) online “group culture” has formed a new type of social capital in China, and has an impact on traditional social networks; 2) there are significant regional differences in the impact of online social networks on consumer credit; 3) the improvement of credit consumption is more driven by Internet technology, and the impact of formal financial institutions on consumer spending is declining. The impact of Internet technology innovation on the improvement of household credit consumption power is constantly improv-ing, and more and more Chinese households get consumer credit support through online social networks.

tural disequilibrium, intensifies. In 2019, as a dominant endogenous growth driver, the domestic consumption influences China's overall economy less significantly. Related data shows that the domestic consumption accounts for 60% of China's GDP in 2019, with a drop of 18pp year on year. At present, increasing residents' consumption potential is significant for promoting China's economic vitality.
With the maturation of China's internet technologies, online social networks facilitate the formation and accumulation of China's new social capital and have a revolutionary influence on social and economic development [1]. The 44th Statistical How great is the influence of internet technologies and online social networks on resident consumption? This paper focuses on studying the effective ways to utilize the internet to promote residents' consumption.

Functions of Social Networks
The emerging of the internet removes the space limitations of China's traditional social networks, expands the network space and raises the network linking speed and efficiency [2]. Therefore, the internet technologies will enhance social networks' functions in individual economic decision making and may replace traditional social networks to some extent [3]. Many studies have demonstrated that social networks have positive impact on information collection, trust building, social security, loan constraint remission and other aspects. Stable social networks can remove the information asymmetry among individuals and establish effective supervision mechanisms, avoid moral hazards and reduce opportunistic behaviors through member screening and group pressure [4] [5]. Besides, stable social networks can offer guarantee to ease the fluctuation of consumption level and reduce the income risks through risk sharing after the occurrence of risks [6] [7] [8].

Factors Affecting the Resident Consumption
One of the important factors that influence the consumption is income level. The absolute income hypothesis and life cycle hypothesis explain the above theory. Many empirical studies find that changes in the consumption expenditure are closely related to the income level. There are loan constraints and frictions in the financial market and thus consumers can't borrow loans and conduct inter-temporal consumption smoothly. Domestic and foreign scholars have conducted many analyses and tests on the relation between loan constraints and household consumption.

1) Model
To check whether online social networks can promote the household consumption expenditure through loan constraints mitigation, referred to the related literature [11], this paper utilizes the phased multiple linear regression model to conduct empirical analysis. The specific form of the model is as follows.   The variables that this paper involves are explained below. 1) Core variables In this paper, the explained variable is the household consumption expenditure and there are three main explanatory variables. The first is the online social network. Online social networks are different from traditional social networks.
Using related studies for reference, the "Online social networks" in this paper indicates the family members' usage of the mobile internet. The CFPS includes questions about family members' usage of the internet through cell phones and computers. The specific questions are as follows. "Do you surf the internet through mobile devices, including cell phones and tablet computers?" "Do you surf the internet through computers?" If the answer to at least one of the two questions is "yes", the variable evaluating the households' online social networks will be 1. If not, the variable will be 0. The second variable is the availability of household consumption loan. The variable is measured in terms of the answer to the question whether households have other consumption loans in addition to the house loan. If the answer is "yes", the variable will be "1". Otherwise, it will be "0". The third variable is the number of licensed provincial formal financial institutions. To check whether there is an alternative relation between the influence of the popularity of formal finance and online social networks on the household consumption expenditure, this paper utilizes the number of licensed provincial formal financial institutions to evaluate the formal financial level. Related data are offered by China Banking and Insurance Regulatory Commission.

2) Control variables
According to the existing related literature, this paper takes household head characteristics variables (such as the gender, age, marriage status, education level and health condition level), household characteristics variables (such as the fam-ily size and per capita net income last year) and province-controlled variables. Table 1 lists main variables involved in this paper and explains the assignment. Table 2 and Table 3 respectively list the descriptive statistics of urban and rural variables among different years. Judging from the statistical results of core variables in this paper, the consumption expenditure of all households increases year by year and the expenditure of urban households is higher than that of rural ones. Meanwhile, the online social network usage level of all family members keeps increasing and the average level of urban family members increased from 0.04 in 2010 to 0.37 in 2018. This indicates that the mobile internet becomes more popular for rural residents and the informationization degree in rural areas intensifies. As for urban households, the average usage level of online social network increased to 0.60 in 2018 from 0.21 in 2010, significantly higher than the average usage level in rural areas. The result is consistent with the reality. From the lens of household consumption loan, the proportion of rural households that borrow consumption loans is higher than that of urban households who borrow consumption loans. The average proportion of rural households that borrow consumption loans was 29% in 2010, hitting a record high. The average proportion decreased to 21% in 2014 and 2016, and then slightly increased to 24% in 2018. In comparison, the average proportion of urban households that borrow household consumption   loans in the urban samples was only about 15%. This is mostly because urban households are wealthier than rural households on the whole.
Statistical results of control variables show that the heads of the household samples are mostly male. These men, with the average age of around 50, have a middle school or high school diploma. Most of them are in employment and good health. Besides, of all household samples, married-couple households are in the majority. The family size of rural households averages 4.10, larger than that of urban households. However, the net income of urban households is obviously higher than that of rural households.  Table 4 and Table 5. Table 4  The regression results of control variables indicate that for female household heads who are married and in employment, the older and the more educated they are and the worse their physical health is, the higher their consumption expenditure is. Besides, for households, the more members are and the higher the total income is, the higher their consumption expenditure is. The same is true in reality. Specifically, consumption expenditure includes households' purchases of products for their everyday needs such as food, clothing and health care. For households, heads of which are old and in bad health, the spending on health care will increase, and for households, the more the members are, the higher the cost of living is and the heavier the burden of living is. In addition, the households with higher income will have higher-quality consumption demand, and their consumption expenditure will be enhanced accordingly. Table 5 shows regression results of urban household samples. In terms of regression results of core explanatory variables, the regression coefficient of online social network of urban household samples is significantly positive, well above that of rural household samples. This shows that the mobile internet penetration    access to loans from formal financial institutions and mainly borrowed consumption loans from these institutions, and thus were less dependent on online social network to get loans. In recent years, a growing number of rural population have moved into cities with the acceleration of urbanization in China, and the proportion of new urban population getting loans via online social network has thus started to go up.

Empirical Result
The regression results of control variables of urban household samples are consistent with those of rural household samples, and thus won't be detailed in this paper.

Further Discussion
A great number of studies have verified that social capital influences the economic and social development as an informal institution [12] [13]. With the wide application of internet technologies, is there any difference between informal and formal institutions in terms of the role in social change? Can the two institutions substitute for each other in this regard? Based on the above analysis, this paper further discusses whether there is substitution effect between the development of formal financial institutions and online social network and also conducts the corresponding empirical testing. The specific form of the model is as follows. Similarly, this paper respectively conducts empirical testing on rural and urban household samples. Related regression results are shown in the following Table 6 and Table 7, in which the regression results of control variables aren't  given due to the limited space since they are the same as the earlier results.

Conclusions and Suggestions
This paper, with 27,632 Chinese households as study samples, empirically tests the impact of online social network on household consumption. We find that online social network accelerates the formation and accumulation of Chinese new social capital and further promotes the domestic households' loan consumption. On the basis of empirical study, this paper proposes the following conclusions and suggestions.
First, the online "group culture" has formed new social capital in China and has an impact on Chinese traditional social network. In Chinese rural areas, with the popularization of the internet, emerging social platforms such as WeChat groups and QQ groups have made traditional social network that is based on blood and clan relationships deconstructed and reconstructed. For Chinese households with stable marriage, large family size and well-educated members, the consumption behavior is remarkably influenced by online social network.
Based on this, this paper suggests the government to vigorously promote the construction of internet infrastructure, encourage Chinese households to use Third, Chinese households' loan consumption is more driven by internet technologies. The influence of formal financial institutions on households' consumption expenditure is on the decrease, while that of internet technology innovation on households' loan consumption is on the increase, which is proved by the fact that more and more Chinese households are borrowing loans via online social network. Related data and empirical results concerning Chinese rural and urban households show that there isn't a significant positive correlation between consumption loan and formal financial institutions. In Chinese rural areas, there's a significant negative correlation between formal financial institutions and consumption expenditure. In Chinese cities, there's also a significant negative correlation between the two according to the data in 2010, 2016 and 2018. Therefore, this paper suggests the government to further stipulate the internet finance market for better development. In the context of the flourishing internet finance market, the government is suggested to formulate and improve Open Journal of Business and Management internet finance-related laws and regulations, take disciplinary actions against loan shark and loan fraud and well preserve the order of China's internet finance market. In addition, formal financial institutions should be encouraged to vigorously develop inclusive finance business, offering more convenient consumption loan products and services to low-income group in rural and urban areas.

Conflicts of Interest
The authors declare no conflicts of interest regarding the publication of this paper.