Digital inclusive finance & the high-quality agricultural development: Prevalence of regional heterogeneity in rural China

Abstract

Developing digital inclusive finance is one of the most effective ways to alleviate financial exclusion in the agriculture sector. For empirical investigation, data from 30 provinces of Rural China is collected from the period 2011 to 2020. The study constructs five dimensions and 22 indicators in total to critically conduct the impact of digital inclusive finance on high-quality agricultural development. The level of agricultural development is measured by entropy weight TOPSIS, and the impact of digital inclusive finance on its high-quality development is empirically tested. The results show that digital inclusive finance has significantly improved the agricultural sector and, particularly, the Eastern region of China has the greatest impact. Three dimensions of digital inclusion finance have regional heterogeneity in terms of impact on agricultural development in Rural China. Data does not show the simple linear relationship between digital inclusion finance and agricultural development quality. The impact of the former on the latter is characterized by the double thresholds. The digital inclusive finance index is the weakest when it is lower than the first threshold that is 4.7704, and the impact of the second threshold that is 5.3186 on high-quality agricultural development is gradually enhanced. After crossing the second threshold, the impact of digital inclusive finance on high-quality agricultural development in Rural China is significantly enhanced. The development of digital inclusive finance should be strengthened in the Central and Western regions to compensate for regional financial imbalances and promote synergy in the high-quality development of agriculture across the country.

The Impact of Digital Inclusive Finance on Rural Revitalization

“…pointed out that the development of digital inclusive finance has significantly promoted the level of rural revitalization, and this promotion is mainly reflected in the four directions of rural revitalization: rural civilization, industrial prosperity, affluent life, and ecological livability. Zhang et al (2023) believe that China's rural revitalization has five demands, namely industrial prosperity and ecological livability, and digital inclusive finance can meet the demands of rural revitalization in many aspects, such as reducing the financial exclusion of traditional finance, promoting rural households, innovation, enhanced risk management, and control capabilities, etc. Chen et al ( 2022) mainly examined the impact of digital economy on rural revitalization and further conducted the mediating effect of industrial upgrading, which concluded that the digital economy would promote the rural industrial prosperity and thus eventually bringing about rural revitalization.…”

“…Digital inclusive finance can make up for the shortcomings of traditional finance and provide services for the country's agricultural economy in terms of availability, convenience, and comprehensiveness (Wang and Mai, 2022). Digital technology has reduced the transaction costs of rural finance on both the supply side and the demand side, not only breaking through the geographical restrictions of traditional financial outlets, but also significantly reducing rent-seeking costs (Zhang et al, 2023). Secondly, ecological livability is the top priority of rural revitalization.…”

Impact of digital inclusive finance on agricultural total factor productivity in Zhejiang Province from the perspective of integrated development of rural industries

“…This development has enabled lowcost, high-efficiency fund matching to some extent, addressing the shortcomings of traditional financial services. From the supply-side perspective, it has enhanced the accessibility of financial services in agricultural sectors [28], providing ample capital elements for agricultural development and rural revitalization. Digital inclusive finance may directly affect agricultural development through its inherent characteristics and advantages.…”

Digitalization Driving High-Quality Converged Development of Rural Primary, Secondary, and Tertiary Industries: Mechanisms, Effects, and Paths

“…Previous studies have shown that the convergence of rural industries and modern finance is an important aspect of rural industry convergence [33][34][35]. At the same time, the support of finance as an important source of capital for the development of rural industries is also crucial for the success of the deep convergence of rural industries.…”