Has Digital Financial Inclusion Narrowed the Urban–Rural Income Gap? A Study of the Spatial Influence Mechanism Based on Data from China

Pengju Liu, Yitong Zhang and Shengqi Zhou ()
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Pengju Liu: Department of Economics, Qingdao University, Qingdao 266061, China
Yitong Zhang: Department of Economics, Ocean University of China, Qingdao 266100, China
Shengqi Zhou: Department of Economics, Qingdao University, Qingdao 266061, China

Sustainability, 2023, vol. 15, issue 4, 1-20

Abstract: Although extant literature has extensively discussed the poverty reduction effect of digital financial inclusion, few papers have explored the association from a spatial perspective. Based on the Peking University Digital Financial Inclusive Index, this study empirically tests the impact of digital financial inclusion on the urban–rural income gap in China. To perform the analysis, this paper employs the spatial Durbin model (SDM) with double fixed effects and a mediating effect model. We find that (1) there is a significant positive spatial correlation between digital financial inclusion and the urban–rural income gap, and both variables have certain spatial agglomeration characteristics; (2) digital financial inclusion has a significant promotion effect and a positive spatial spillover effect on reducing the urban–rural income gap; and (3) the test of the spatial influence mechanism shows that the above effect is achieved by promoting industrial structure upgrading. This paper combines the above results to propose corresponding policy recommendations, which are valuable for other developing countries and emerging economies with similar backgrounds to China.

Keywords: digital financial inclusion; urban–rural income gap; spatial Durbin model; mediating effect; industrial structure upgrading (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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