Can the Use of Digital Finance Promote the Enhancement and Quality Improvement of Household Consumption Among Farmers?

Sheng Xu, Xichuan Liu (), Lu Zhang and Yu Xiao
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Sheng Xu: College of Economics and Management, Huazhong Agricultural University, Wuhan 430070, China
Xichuan Liu: College of Economics and Management, Huazhong Agricultural University, Wuhan 430070, China
Lu Zhang: College of Economics and Management, Huazhong Agricultural University, Wuhan 430070, China
Yu Xiao: College of Economics and Management, Huazhong Agricultural University, Wuhan 430070, China

Economies, 2024, vol. 12, issue 12, 1-20

Abstract: The key strategic point for facilitating domestic circulation is to enhance and expand household consumption. Based on a survey of 1080 farming households in Hunan, Hubei, and Jilin Provinces, this study examines the impact of digital finance use on the scale and structural upgrading of household consumption among farmers. The findings indicate that digital finance use effectively expands the scale of household consumption and promotes structural upgrades. The results remain robust through various endogenous and robust methods. Heterogeneity analysis reveals that the benefits of digital finance use are greater for middle- to high-income groups and those with lower education levels, indicating the presence of a digital divide effect. Furthermore, the construction of village communities, skill training, improvements in village logistics services, and the availability of medical clinic facilities can enhance the consumption-promoting effects of digital finance use. Mechanism analysis shows that digital finance primarily operates through alleviating credit constraints, enhancing risk prevention, and improving financial returns to influence the scale and structural upgrading of household consumption. This study provides policy insights for rural revitalization and unlocking the consumption potential of rural residents.

Keywords: use of digital finance; consumption upgrading; credit constraints; risk prevention; financial returns (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2024
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