Is the Development of Inclusive Finance Truly Able to Alleviate Poverty?——an Empirical Study Based on Spatial Effect and Threshold Effect

Hui Peng, Jingjing Wang, Ling Wen, Pan Ding and Yangjin Zhu

Emerging Markets Finance and Trade, 2022, vol. 58, issue 9, 2505-2521

Abstract: The inclusive finance can impose significantly varying effects on poverty alleviation. Based on the data extracted from 31 provinces across China from 2007 to 2017, the spatial panel model and the threshold regression model were established, so as to explore the spatial effect and the threshold effect between inclusive finance and poverty alleviation. Moreover, this study attempts to reveal the influencing mechanism of these two effects imposed by the inclusive finance. The study finds that: First, the inclusive finance can impose significant effects on the poverty relief efforts. Second, the threshold effect can be evidently shown given that the inclusive finance facilitates both capital inflows and outflows. However, in the longer run, the capital inflows will exceed the outflow. In the meantime, the spatial effects are revealed from the aspects of spatial heterogeneity and spatial dependence. Judging from the research findings, the Chinese authority shall pay closer attention to the development of the western regions, so as to narrow the developmental gap of inclusive finance among regions. In addition, we shall attach importance to guiding the capital inflows while reducing the capital outflows so as to speed up the crossing of the threshold.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:58:y:2022:i:9:p:2505-2521

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DOI: 10.1080/1540496X.2021.2002141

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