Does mobile payment adoption increase household portfolio diversification? Evidence from China

Weisong Qiu

Finance Research Letters, 2025, vol. 75, issue C

Abstract: Extensive documentation indicates that holding highly concentrated portfolios can lead to significant losses in financial welfare. Using data from the 2017 to 2019 China Household Finance Survey, this study examines the impact of mobile payment adoption on household portfolio diversification. Using a two-way fixed effects model, we identify a positive correlation between mobile payment usage and the diversification of household portfolios. This relationship withstands various robustness tests, encompassing analyses for endogeneity, selection bias, and alternative proxies for key variables. Mechanism analysis indicates that mobile payments function via financial information and risk preference. Heterogeneity analysis suggests that the positive impact of mobile payments is particularly pronounced for households with lower educational attainment, those facing health risks, and residents of rural areas.

Keywords: Mobile payment; Information and communication technology; Digital finance; Portfolio diversification; Financial welfare (search for similar items in EconPapers)
JEL-codes: D14 E21 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:75:y:2025:i:c:s1544612325001758

DOI: 10.1016/j.frl.2025.106911

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