 The effectiveness of China's fiscal subsidy policies in supporting the development of rural inclusive financeXiang Yin, Yin-E Chen and Chun-Ping Chang Economic Analysis and Policy, 2025, vol. 85, issue C, 392-406 Abstract: In China, fiscal subsidies can promote financial inclusion, but there are still policy failures. This paper uses deterministic evolutionary game and stochastic evolutionary game model to analyze the effectiveness and boundary conditions of fiscal subsidy policy to support rural inclusive financial development. The study found that an evolutionarily stable strategy will emerge only when targeted fiscal subsidies can cover the initial operating costs of an inclusive financial system. In the deterministic evolutionary game, there are two stable evolutionary strategies on the demand side due to financial literacy and economic differences. In a stochastic evolutionary game, the system converges to the (default, loan) strategy, and random disturbances weaken the effectiveness of the policy. Reducing the rate of targeted financial subsidies, reducing the value of collateral, and increasing the amount of loans can improve the effectiveness of policies. According to the research results, policy recommendations are put forward. Keywords: Fiscal subsidy policy; Rural inclusive finance development; Effectiveness; Deterministic evolutionary game; Stochastic evolutionary game (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:85:y:2025:i:c:p:392-406 DOI: 10.1016/j.eap.2024.12.012 Access Statistics for this article Economic Analysis and Policy is currently edited by Clevo Wilson More articles in Economic Analysis and Policy from Elsevier |
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