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Is the Development of China’s Financial Inclusion Sustainable? Evidence from a Perspective of Balance

Bao Zhu (), Shiting Zhai () and Jing He ()
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Bao Zhu: College of Finance and Statistics, Hunan University, Changsha 410079, China
Shiting Zhai: Educational Science Research Institute, Hunan University, Changsha 410006, China
Jing He: College of Finance and Statistics, Hunan University, Changsha 410079, China

Sustainability, 2018, vol. 10, issue 4, 1-16

Abstract: Balance plays an important role in the sustainable development of China’s financial inclusion. First, this paper reports the entropy weight method used to construct a financial inclusion index ( FII ) and measure the level of development of financial inclusion in China’s regions. Second, the concept of the Gini coefficient of financial inclusion is proposed and the structural balance of China’s financial inclusion is shown, as calculated by using this Gini coefficient. Third, we report the use of a dynamic shift-share model to further discuss the development balance of the financial inclusion of China’s regions. The results show that there is an imbalance in the development of financial inclusion in China’s regions. For 2006–2016, the Gini coefficient and the structural balance of China’s financial inclusion show a significant downward trend. The gap of the financial inclusion development between regions is narrowing and the structure of China’s financial inclusion tends to be reasonable. The penetration dimension is at a structural disadvantage. Availability and usage dimension are at a structural advantage, which can effectively promote the development of China’s financial inclusion. In the future, the government should establish a more balanced financial inclusion development mechanism, making full use of structural advantages of the availability and usage of financial services to promote the sustainable development of China’s financial inclusion.

Keywords: financial inclusion; sustainable development; Gini coefficient; development balance; structural balance; dynamic shift-share model (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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