Does Digital Inclusive Finance Mitigate the Negative Effect of Climate Variation on Rural Residents’ Income Growth in China?

Abstract

Global anthropogenic greenhouse gas emissions have exacerbated climate variation. Climate variation impacts the agricultural production and rural residents’ income negatively, further widening the urban-rural income gap and harming the co-benefits. Narrowing the income gap has always been a global concern and an important part of China’s rural revitalization strategy. However, little is known about whether digital inclusive finance can mitigate the negative impact of climate variation on rural residents’ income growth in China. Using panel data from 31 provinces in China from 2011 to 2019 and a digital inclusive finance index developed by Peking University, together with historical temperature data, this study examined the impact of digital inclusive finance on Chinese rural residents’ income growth in response to climate variation. It was found that digital inclusive finance could promote rural resident operating, wage, and transfer income growth. A heterogeneity analysis revealed that rural residents in central and western regions experienced larger digital inclusive finance facilitating effects on income growth than the eastern regions. Further analyses using the Spatial Dubin Model found that digital inclusive finance had a spatial spillover effect as it could significantly promote income growth in neighboring provinces. Although climate variation reduced rural residents’ income and increased their risks, digital inclusive finance significantly mitigated this negative effect. Digital information infrastructure construction, financial risk prevention, digital financial knowledge, and e-commerce popularization were practical paths to optimizing inclusive finance development in rural areas and promoting poverty alleviation and rural revitalization to resist climate risks.

Can Mobile Payment Increase Household Income and Mitigate the Lower Income Condition Caused by Health Risks? Evidence from Rural China

“…As we mentioned in Section 3 , we divided households into two groups based on whether they had unhealthy household members and tested the effects of mobile payment in each group according to Yin et al (2019) [ 51 ] and He et al (2022) [ 58 ]. The results are reported in Table 8 .…”

“…To test whether health risks will lower the income level of rural residents, we applied the OLS model to Equation (3): where is our focus variable and the other variables are the same as Equation (1). Then, following Yin et al (2019) [ 51 ] and He et al (2022) [ 58 ], we divided samples in two groups depending on whether they had unhealthy household members. The effects of mobile payment on rural household income will be examined in each group to verify its moderating role.…”

How does digital finance affect industrial transformation?

“…The inclusive nature of digital inclusive finance provides new ways to reduce financial poverty. Numerous studies have also confirmed that digital inclusive finance can increase the income sources and income scale of disadvantaged groups, narrow the income gap and achieve inclusive growth (Yu and Wang, 2021;He et al, 2022). The increase in income can promote consumption upgrading through the transmission mechanism of production restructuring and industrial upgrading Yang et al, 2021).…”

Unraveling the influence and mechanism of digital inclusive finance on household financial substitution: evidence from China

“…DIF is a newly developing industry, formed based on the organic integration of digital technology and finance. It involves the application of the internet and big data technology and the effective integration of the concept of inclusive finance (He et al, 2022). DIF can play an essential role in promoting household consumption (Li et al, 2020).…”

“…Studies in all these streams of literature tend to focus on the effects and mechanisms of DIF on the single economic behavior of households and the analysis of household economic behavior about each other. For example, previous studies have examined the relationship between DIF, and household financial investment and consumption behavior (He et al, 2022;Li et al, 2022;Yu et al, 2022). Particularly, how to measure the impact of DIF on household economic behavior when DIF affects both household financial investment and consumption has generally affected household behavioral choices and the inclusive application of DIF (Zhao et al, 2022).…”