Evaluating digital financial inclusion's impact on regional economic efficiency in China

Zhihao Guan and Jian Han

International Review of Economics & Finance, 2025, vol. 102, issue C

Abstract: Digital financial inclusion (DFI) narrows the gap in regional financial services, reshapes regional division of capital and labor, and enhances overall economic efficiency. Therefore, this study examines how DFI affects regional economic efficiency using Chinese provincial panel data from 2011 to 2020. The results show that DFI significantly improves regional economic efficiency measured by technical efficiency (TE), particularly by narrowing the urban–rural income gap and enhancing factor accessibility in vulnerable areas and groups. This effect is more pronounced when supported by well-developed transportation infrastructure and traditional finance and is based on a certain level of economic development. Mechanism analysis confirms that DFI promotes efficiency by stimulating entrepreneurial activity and reducing educational gap.

Keywords: Digital financial inclusion; Regional economic efficiency; Mechanism of influence; Technical efficiency (search for similar items in EconPapers)
JEL-codes: E20 G21 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:102:y:2025:i:c:s1059056025004885

DOI: 10.1016/j.iref.2025.104325

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