Digital Financial Inclusion, Household Financial Participation and Well-Being: Micro-Evidence from China

Abstract

Though financial inclusion has drawn a lot of attention lately, especially in emerging markets, it remains unclear how it affects household well-being. This study investigates the connection between digital financial inclusion (DFI) and household well-being using two databases in China. The findings suggest that DFI is positively associated with household well-being. Mechanism analysis reveals that a rise in DFI facilitates household financial participation, thereby increasing the probability of household well-being. Our further empirical analysis demonstrates that groups with lower education and income levels are more significantly affected by DFI regarding household well-being. Overall, the research provides empirical evidence for the assertion that expanding financial inclusion in the digital economy era can promote social fairness and provide a basis for a vigorous expansion of financial inclusion in emerging economies.

RETRACTED: Can Digital Financial Inclusion Help Reduce Urban Crime? Evidence from Chinese Criminal Judgment on Theft Cases

“…In terms of the economic impact of digital financial inclusion, scholars currently focus on the intension of digital financial inclusion [47], the poverty reduction effect of digital financial inclusion [48], the contribution of digital financial inclusion to the real economy [49], and the risks and regulation of digital financial inclusion [50]. Firstly, at the macro level, some studies have demonstrated that digital financial inclusion enhances bank operations [51], reduces poverty and income inequality [48], narrows the urban-rural income gap [52], and boosts social welfare [53,54]. This is due to the fact that digital financial inclusion develops together with e-commerce, lowering the threshold for financial services and resulting in scale and long-tail effects.…”

Research on the impact and mechanism of digital capabilities and digital finance on household wealth in the context of aging

“…For families of all ages, existing research has found that with the increasing number of users and the continuous improvement of digital financial products, many products have launched intelligent investment advisory functions, which can recommend various asset portfolios based on income, assets, risk budgeting, and return goals [30] , simplifying the process of participating in the financial market without the need for complex financial calculations and planning [4] , which mitigates information asymmetries asymmetry. As a result, digital finance can significantly facilitate households' participation in financial investment [32] , increase the types of financial assets held by households [6] , and increase the proportion of risky assets allocated and the level of returns [4] , thereby increasing residents' property income and promoting household wealth accumulation. Moreover, digital finance can also help elderly families better plan their pensions to increase family wealth [32] , [33] .…”

“…As a result, digital finance can significantly facilitate households' participation in financial investment [32] , increase the types of financial assets held by households [6] , and increase the proportion of risky assets allocated and the level of returns [4] , thereby increasing residents' property income and promoting household wealth accumulation. Moreover, digital finance can also help elderly families better plan their pensions to increase family wealth [32] , [33] . In addition to investment, digital finance does not require collateral and relaxes the credit constraints of relatively poor areas and groups due to their own economic condition limitations and information asymmetry [1] , stimulating the willingness of households to start their own businesses [6] , [34] , and individual entrepreneurship also has a positive impact on reducing household poverty, narrowing the income gap, and increasing household wealth [6] , [35] .…”

Decision Making with the Use of Digital Inclusive Financial Systems by New Agricultural Management Entities in Guangdong Province, China: A Unified Theory of Acceptance and Use of Technology-Based Structural Equation Modeling Analysis

“…Through cloud computing, financial institutions can process large amounts of credit data securely and efficiently; meanwhile, through blockchain technology, financial institutions can build an open and transparent credit system to prevent fraud and default [27]. Smart financial services such as financial inclusion apps and social media finance can provide farmers with more convenient and personalized credit services [28]. Digital financial development can significantly contribute to intermediary product innovation, as financial institutions can recommend the most suitable credit products and services to farmers through smart recommender systems, increasing their credit satisfaction [29].…”