The promotion effect of digital finance development on residents’ risk preference: evidence from China

Tianqi Bian, Zhangyong Xu and Tan Liu

Applied Economics Letters, 2025, vol. 32, issue 5, 665-670

Abstract: The deep application of digital finance may change residents’ risk preference, which poses new challenges for maintaining the stability of the financial system. However, the empirical evidence is still in its infancy. Taking China households as research samples, we use Oprobit and IV regression models, and the results confirm that digital finance has significantly improved residents’ risk preference statistically. We explore the underlying mechanism and find that digital finance can improve risk preference by accumulating household wealth, financial literacy and social interaction. Our conclusion provides reference for preventing risk accumulation brought by fintech and maintaining financial stability in the digital era.

Date: 2025
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DOI: 10.1080/13504851.2023.2281457

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