Climate Change Risk, Digital Financial Inclusion and Multidimensional Relative Poverty Among Farm Households

Juan Luo () and Lixin Chen ()
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Juan Luo: Business School, Hunan Normal University, Changsha 410081, China
Lixin Chen: Business School, Hunan Normal University, Changsha 410081, China

Sustainability, 2025, vol. 17, issue 12, 1-23

Abstract: Climate risk has emerged as a pressing global challenge, significantly undermining livelihood capital, income stability, and living standards among vulnerable populations. Leveraging balanced panel data from the China Household Finance Survey (CHFS) spanning 2013–2019, this study employs a binary Logit fixed-effects model to examine how climate change risk affects farm households’ multidimensional relative poverty, with particular attention to the moderating role of digital financial inclusion. The findings demonstrate that climate change risk significantly exacerbates multidimensional relative poverty among farm households, while digital inclusive finance effectively mitigates these adverse impacts. Notably, subdimensional analysis reveals that the depth of digital financial usage exerts the strongest influence. In addition, there is heterogeneity in this moderating effect, with digital inclusive finance having a more significant mitigating effect on multidimensional relative poverty in rural households in the central region, with middle and higher incomes, as well as with high digital literacy. This study provides valuable insights into the use of financial instruments to mitigate climate risks, improve the climate resilience of rural populations, and strengthen multidimensional approaches to poverty governance.

Keywords: climate change; digital financial inclusion; multidimensional relative poverty; moderating effect (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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