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

Abstract

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.

Impact and Mechanisms of Digital Inclusive Finance in Relation to Farmland Transfer: Evidence from China

“…This index has wide coverage, a comprehensive indicator selection, includes typical institutions in China's digital finance field as samples, and conducts research on massive amounts of microdata to construct the complete "Peking University Digital Inclusive Finance Index of China". It covers 31 provinces, 337 prefecture-level cities, and approximately 2,800 counties and districts from 2011 to 2020, accurately and scientifically depicting the real development status of digital inclusive finance in China, and providing data that support relevant research fields; it is widely used by many scholars [73][74][75][76].…”

Digital inclusive finance, industrial structure, and economic growth: An empirical analysis of Beijing-Tianjin-Hebei region in China

“…With the natural advantages of efficient search, calculation, and analysis of data, it realizes the interconnection of information [ 40 ], reduces the adverse selection problem caused by information asymmetry between the supply and demand sides of funds [ 41 ], improves the efficiency of financial services [ 42 ], optimizes the matching degree of financial capital and real assets, realizes the optimal allocation of financial resources, and gives full play to the significant role of finance in promoting economic growth [ 7 ]; Secondly, digital inclusive finance also expands financing channels [ 43 ], reduces the threshold of financial services and financing costs [ 7 ], provides more convenient financing services for enterprises and residents [ 44 ], effectively alleviates the financing constraints faced by enterprises, promotes enterprise innovation and industrial development [ 2 , 9 ], and promotes macroeconomic growth. Thirdly, with its excellent universality and low threshold characteristics, digital inclusive finance has improved the availability of financial services [ 5 , 7 ]. Groups marginalized by traditional financial services can obtain financial resources, broaden the coverage of financial services, and reduce ’financial exclusion’ [ 45 ].…”

“…It is regarded as an important engine to optimize the industrial structure. At the same time, digital inclusive finance has an impact on many fields such as innovation and entrepreneurship [ 2 ], consumption [ 5 ], savings [ 6 ], and poverty reduction [ 7 ], which in turn affect industrial structure and economic growth.…”

Research on the Capability to Prevent Returning to Poverty and Its Enhancement Path for the Ecologically Fragile Areas: A Case Study of Enshi Prefecture

“…An in-depth review of existing research highlights the complexity of factors leading to a household's return to poverty, encompassing economic, social, cultural, and environmental aspects [10,53,54,58,62]. Households that have previously overcome poverty might face it again due to various challenges, including economic setbacks, social issues, natural disasters, and other unexpected events [63][64][65][66]. This situation points to the need for a detailed investigation into the inherent reasons that can help communities in ecologically sensitive areas avoid falling back into poverty, requiring an approach considering multiple dimensions [67].…”