Digital finance and wealth inequality: Evidence from a big tech platform in China during the COVID-19 pandemic

Yan Shen, Ang Sun, Zikun Zhou and Dun Jia

Pacific-Basin Finance Journal, 2024, vol. 83, issue C

Abstract: Inequality is a longstanding concern, yet how the rapid advancement of financial technology could possibly reshape inequality in the financial market remains unclear. This study analyzes wealth inequality dynamics among Chinese households during the COVID-19 pandemic, using random sample data collected from a quarterly online survey on a big tech platform. Our findings reveal that families with middle-level wealth incurred substantial losses, whereas wealthier families experienced relatively minor reductions in wealth and were able to recover from the situation swiftly. Despite this, our study indicates that digital wealth management, as channeled via major Chinese digital platforms, mitigated the rising wealth inequality triggered by the pandemic. This is presumably because digital finance improves accessibility to assets with lower risks for middle-level wealth groups. Our study has strong policy implications, namely that regulations on digital financial platforms should not underestimate the beneficial impact of digital finance on inequality reduction when balancing innovation and financial stability.

Keywords: Fintech; Inequality; Chinese capital markets (search for similar items in EconPapers)
JEL-codes: D14 G11 G21 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927538X23002974
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:83:y:2024:i:c:s0927538x23002974

DOI: 10.1016/j.pacfin.2023.102226

Access Statistics for this article

Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee

More articles in Pacific-Basin Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().