The role of social capital in the impact of multiple shocks on households' coping strategies in underdeveloped rural areas.

ABSTRACT

Social capital has long been recognized as a facilitator of socio-economic development. However, the role of social capital in enhancing resilience to multiple shocks in rural China remains insufficiently explored. This study focus on the resilience of households that have recently get rid of poverty and reside in underdeveloped rural areas of China. Unlike previous studies, the article incorporates multiple shocks, social capital, and households' coping strategies into a research framework at the micro level. This study systematically analyses the multiple shocks experienced by households, their coping strategies, and further explores the mediating role of social capital. Utilizing two waves of a rural household panel survey data collected in six underdeveloped counties in 2015 and 2018 in China, we present four key findings. Currently, households primarily contend with drought, illness of family members, and the high costs of agricultural inputs as the main shocks. Their predominant coping strategy is reducing consumption. Importantly, social capital exhibits a mediating effect, accounting for 9.8% of the impact of multiple shocks on households' coping strategies. Notably, natural disasters significantly diminish the informal functions of social capital. While social capital exerts a full mediating effect in non-agricultural households, this effect is not observed among others. This study contributes to a better understanding of the dynamics and specificities of social capital in vulnerable rural areas. Additionally, the findings provide policymakers with practical insights regarding differentiated and preemptive risk governance approaches.