A Study on the Impact of Digital Inclusive Financial Development on the Welfare Differences Between Urban and Rural Residents

Wenqi Li (), Jingjing Fan and Jiawei Zhao
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Wenqi Li: Henan University of Technology
Jingjing Fan: Henan University of Technology
Jiawei Zhao: Henan University of Technology

Journal of the Knowledge Economy, 2024, vol. 15, issue 2, No 154, 9028 pages

Abstract: Abstract Against the backdrop of the transformation of China’s main social contradiction into “the contradiction between people’s growing need for a better life and unbalanced and insufficient development,” narrowing the welfare gap between urban and rural residents has become an important tool to promote economic development and social stability. Based on Peking University’s Digital Inclusive Finance Development Index, this paper measures the level of welfare disparity between urban and rural residents using provincial economic data from 2013 to 2020 and explores the impact of digital inclusive finance development on the welfare disparity between urban and rural residents. The results of the study show that: (1) the welfare disparity between urban and rural residents in most Chinese provinces (cities) has been decreasing year by year, with the northeastern and eastern regions having smaller levels of welfare disparity between urban and rural residents, while the central and western regions have larger levels of welfare disparity between urban and rural residents. (2) The development of digital inclusive finance is conducive to narrowing the welfare gap between urban and rural residents in each province (city) in China. From the three sub-indices of digital inclusive finance, the breadth of development has the greatest impact on narrowing the welfare gap between urban and rural residents, followed by the depth of use, and finally the degree of digitalization. (3) A test of regional heterogeneity reveals that the development of digital inclusive finance can significantly reduce the welfare differences between urban and rural residents in the central and western regions, while the impact on the welfare differences between urban and rural residents in the eastern and northeastern regions is not significant.

Keywords: Digital inclusive finance; Urban–rural population welfare differences; Regional heterogeneity (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s13132-023-01424-4

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