The Influence of Urban Digital Financial Spatial Correlation Network Centrality on Common Prosperity

Yaqi Liu (), Sen Wang and Jing Guo ()
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Yaqi Liu: School of Economics, Shanxi University of Finance and Economics, Taiyuan 030006, China
Sen Wang: School of Economics, Shanxi University of Finance and Economics, Taiyuan 030006, China
Jing Guo: School of Government, Nanjing University, Nanjing 210023, China

Mathematics, 2025, vol. 13, issue 22, 1-28

Abstract: While the inclusiveness of digital finance is widely acknowledged, existing research predominantly focuses on its developmental level, with limited attention to its spatial correlation network and structural characteristics. A city’s centrality within this network governs the flow and allocation of digital financial resources, thereby influencing interregional and urban-rural efficiency in resource allocation and income distribution, which ultimately shapes the trajectory of common prosperity. Based on panel data from 280 Chinese cities (2011–2021), this study employs social network analysis to measure urban centrality in the digital financial spatial correlation network and empirically investigates its impact and mechanisms on common prosperity. The main findings are as follows: (1) Benchmark regressions confirm that overall network centrality and its three dimensions—degree, betweenness, and closeness centrality—significantly promote common prosperity, specifically by enhancing the “wealth” dimension and reducing regional development disparities, with the growth effect currently surpassing the inclusion effect. (2) Robustness checks, including instrumental variable approaches addressing endogeneity, affirm the reliability of the core findings. (3) Heterogeneity analysis reveals that the positive effect is more pronounced in cities that are less developed or have weaker financial foundations, such as those in Western China, non-financial centers, cities with no presence of formal financial institutions in antiquity, fifth-tier cities, and small and medium-sized cities, suggesting that network centrality serves as a catalytic tool for urban catch-up strategies. (4) Mechanism analysis identifies that fostering entrepreneurship, particularly among self-employed individuals and wholesale/retail enterprises characterized by decentralized operations and abundant transaction data, is the primary channel through which centrality advances common prosperity. This study provides insights into promoting balanced regional development and common prosperity by optimizing the spatial structure of digital finance.

Keywords: common prosperity; digital finance; spatial correlation network; city centrality; entrepreneurship (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2025
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