Does Digital Inclusive Finance Help County Level Governance in the Five Provinces of Northwest China, from the Perspective of Economic Resilience?

Xinshu Gong and Liyu Zhao ()
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Xinshu Gong: Department of Economics and Management, Shihezi University, Shihezi 832000, China
Liyu Zhao: Department of Economics and Management, Shihezi University, Shihezi 832000, China

Sustainability, 2024, vol. 16, issue 10, 1-26

Abstract: The sustainable development of a country requires stable funds to reshape and restore its economy, something which cannot be separated from the support of financial services. Digital financial inclusion, with its inclusive and extensive features, has provided a new impetus for economic development and governance. Based on the panel data of 193 counties in 5 provinces of northwest China from 2014 to 2021, this paper uses a bi-directional fixed effect model, an intermediary effect model and a threshold effect model in order to test digital inclusive finance and county-level economic resilience, and to explore the internal correlation details. The results show that digital inclusive finance will significantly enhance the economic resilience of the five northwestern provinces by improving capital allocation efficiency, enhancing entrepreneurship and employment vitality, and reducing pollution emissions. In addition, there is a double threshold effect between capital allocation efficiency and employment vitality, in which the threshold effect of capital allocation efficiency presents a progressively increasing state, and in which the threshold effect of entrepreneurship and employment vitality presents a state of fluctuating increase. Therefore, China needs to further improve the digital inclusive financial environment in its northwest; continue and deepen the significant functions of digital inclusive finance in resource allocation efficiency, entrepreneurship and employment vitality, and environmental protection; and provide guidance for solving regional imbalances and promoting national sustainable development.

Keywords: digital inclusive finance; governance; economic resilience; capital allocation efficiency; entrepreneurship and employment vitality; pollution emissions (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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