How does digital finance affect industrial structure upgrading? Evidence from Chinese prefecture-level cities.

As China transitions to high-quality development, digital inclusive finance has the potential to promote common prosperity. While theoretically, digital inclusive finance is considered conducive to achieving this goal, its practical effects and underlying mechanisms need to be further studied and clarified. This research aims to explore the impact of digital inclusive finance on common prosperity, identifying its heterogeneity characteristics and investigating the mechanisms underlying this relationship. The study reveals the following findings: Firstly, digital inclusive finance plays a positive role in facilitating common prosperity, which is mainly achieved by focusing on the aspect of affluence. However, the effect of digital inclusive finance on enhancing commonality is not significant. Secondly, the breadth of coverage, depth of usage, and digitization level of digital inclusive finance all contribute to promoting both common prosperity and affluence. Further, a broader coverage and higher digitization level are associated with increased commonality. Thirdly, digital inclusive finance contributes to improving prosperity in both the eastern and western regions of China but leads to higher (lower) commonality in the western (eastern) region. Compared with the central and western regions, digital inclusive finance can play a better role in promoting common prosperity in the eastern region. Lastly, the study identifies three channels through which digital inclusive finance promotes common prosperity: advancing individual entrepreneurship, stimulating employment, and propelling Internet financing. 

Effect of digital inclusive finance on common prosperity and the underlying mechanisms

The United Nations (UN) 2030 agenda for sustainable development seeks to eliminate poverty in all its forms. An estimated 1.3 billion people in the BRICS countries are below the poverty line. This study examines the nexus between digital financial inclusions (DFI) and income inequality GINI) in the context of BRICS countries, with a focus on the moderate impacts of technological innovation (TI) and infrastructure development (ID). Applying the Driscoll-Kraay (DK) and fixed effects tests, the results show that DFI significantly negatively influences income inequality, with TI and ID contributing to strengthening this effect. The findings indicate that implementing TI and ID can potentially decrease income inequality in BRICS nations by facilitating faster, more secure, cost-effective transactions and offering greater access to markets and essential services. This study emphasises the need for policymakers to prioritise the implementation of TI and ID to accomplish sustainable development goals and encourage financial inclusion for all in the BRICS countries. 

Digital financial inclusion and income inequality nexus: Can technology innovation and infrastructure development help in achieving sustainable development goals?

The analysis of consumer demand and behavior drew attention to overpopulation in the research area of household finance. This paper investigates the impact of digital inclusion and supply chain on household consumption patterns. Using panel datasets of household surveys in China, we find that digital inclusion could lead to higher total consumption and consumption in different categories. We provide evidence that digital inclusion and the supply chain could alter consumption patterns due to a heterogeneous impact of digital inclusion on shares of consumption categories. Our research indicates that digital inclusion significantly affects household decision-making and consumer behavior. 

What matters to reshaping consumption patterns in China? Digital inclusion and supply chain

Digital inclusive finance (DIF) plays an active role in preventing poverty-stricken groups from returning to poverty and reducing poverty. This paper empirically tests the impact of DIF on rural poverty alleviation using panel data from 30 Chinese provinces from 2011 to 2020 as a sample. It employs multiple linear regression, mediation effect models, and threshold effect models. The results show that: (1) DIF and its three sub-indicators (coverage breadth, depth of use, and digitalization degree) have significant poverty reduction effects, and the findings hold even when endogeneity is taken into account; (2) a study of regional heterogeneity found that DIF and its sub-indices, coverage and depth of use in the eastern region, have the greatest effect on the poverty alleviation of rural residents, and the effects in the central and western regions have the least effect; (3) the mediation effect test found that DIF could indirectly promote poverty alleviation in rural areas by promoting regional economic growth and narrowing the urban-rural income gap. The Sobel test shows that the mediating effect of regional economic growth is greater than the mediating effect of the urban-rural income gap; (4) it is found through the threshold effect test that regional economic growth has a double threshold effect on rural poverty alleviation, and as the threshold value continues to increase, the poverty reduction effect increases in turn. Therefore, this paper puts forward policy suggestions for the aspects of accelerating the development of DIF in rural areas, implementing regionally differentiated poverty reduction strategies according to local conditions, promoting regional economic growth, and narrowing the urban-rural income gap.

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Can China’s Digital Inclusive Finance Alleviate Rural Poverty? An Empirical Analysis from the Perspective of Regional Economic Development and an Income Gap

Impact of Digital Financial Inclusion on Consumption Inequality in China

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Impact of Digital Financial Inclusion on Consumption Inequality in China