Research on the Impact of Digital Finance on China's Urban-Rural Income Gap
DOI:
https://doi.org/10.58567/rea01010005Keywords:
Digital finance, Urban-Rural income gap, Threshold effectAbstract
The integration of digital technology and traditional finance has further achieved the goal of low-cost and sustainable financial services and contributed to high-quality economic development. Based on the data from 31 provinces in China from 2011 to 2021, this paper empirically analyzes the impact of digital finance on the urban-rural income gap. The results show that digital finance can significantly narrow the income gap between urban and rural residents. The quantile test shows that the greater the urban-rural income gap, the stronger the role of digital finance in narrowing the urban-rural income gap. The threshold effect test shows that the narrowing effect of digital finance on the urban-rural income gap will first increase and then weaken with the continuous improvement of the development level. Heterogeneity analysis shows that the secondary indicators of digital finance can significantly narrow the urban-rural income gap, and the effect of depth of usage is the most obvious. Moreover, digital finance has a significantly stronger effect on narrowing the urban-rural income gap in the eastern region than in other regions. Therefore, we should vigorously promote the development of digital finance and give full play to its effectiveness in narrowing the urban-rural income gap.
References
Chen, D. P., Ding, L. R., & Gao, M. Z. (2022). Digital Finance and Urban-rural Income Gap under the Background of Common Prosperity—An Empirical Study Based on the Panel Data of Prefecture Level Cities. Journal of Nanjing Agricultural University (Social Sciences Edition), 06, 171-182. doi: 10.19714/j.cnki.1671-7465. 20220830.001. (in Chinese)
Chen, Y. M., Wang, Z., & Zhang, M. (2021). International Comparison and Prospect of Digital Finance Research. Comparative Economic & Social Systems, 01, 180-190. DOI: 10.3969/j.issn.1003-3947.2021.01.018 (in Chinese)
Chen, Y. R., Zhang, Q. Y., & Xiong, D. P. (2022). The Role of Financial Development in Narrowing the Urban-Rural Income Gap in China——From the Perspectives of Direct and Indirect Inclusion. Contemporary Economic Research,11,117128.https://kns.cnki.net/kcms/detail/detail.aspx?dbcode=CJFD&dbname=CJFDAUTO&filename=DDJJ202211012&uniplatform=NZKPT&v=woNsm5WLrd8dE1F1y04wSCDFXRryfAgmMdw5ZoS1uv8qhuNFNWHUZeFOQqJblG. (in Chinese)
Cheng, M. W., Han, J. J., & Yang, W. R. (2022). Economic Growth, Urban-Rural Income Diparity and Common Prosperity. Finance and Trade Research, 10, 1-17. doi:10.19337/j.cnki. 34-1093/f.2022.10.001. (in Chinese)
Ding, L. U. (2002). Rural-urban income disparity: impact of growth, allocative efficiency, and local growth welfare. China Economic Review, 4(13), 419-429. https://doi.org/10.1016/S1043-951X(02)00100-1.
Guo, F., Wang, J. Y., Wang, F., Kong, T., Zhang, X., & Cheng, Z. Y. (2020). Measuring China’s Digital Financial Inclusion: Index Compilation and Spatial Characteristic. China Economic Quarterly, 04, 1401-1418. doi:10.13821/j.cnki.ceq. 2020.03.12. (in Chinese)
He, C., & Du, H. (2022). Urbanization, inclusive finance and urban-rural income gap. Applied Economics Letters, 29(8), 755-759. https://doi.org/10.1080/13504851.2021.1885603.
Huang, Y. P, & Huang, Z. (2018). The Development of Digital Finance in China: Present and Future. China Economic Quarterly, 04, 1489-1502. doi:10.13821/j.cnki.ceq.2018.03.09. (in Chinese)
Ji, X., Wang, K., Xu, H., & Li, M. (2021). Has Digital Financial Inclusion Narrowed the Urban-Rural Income Gap: The Role of Entrepreneurship in China. Sustainability, 13(15), 1-20. https://doi.org/10.3390/su13158292.
Korupp, S. E., & Szydlik, M. (2005). Causes and trends of the digital divide. European Sociological Review, 21(4), 409-422. https://doi.org/10.1093/esr/jci030.
Lee, W. C., Cheong, T. S., Wu, Y., & Wu, J. (2019). The impacts of financial development, urbanization, and globalization on income inequality: A regression-based decomposition approach. Asian Economic Papers, 18(2), 126-141. https://doi.org/10.1162/asep_a_00703.
Li, Y., Wang, M., Liao, G., & Wang, J. (2022). Spatial Spillover Effect and Threshold Effect of Digital Financial Inclusion on Farmers’ Income Growth—Based on Provincial Data of China. Sustainability, 14(3), 1-16. https://doi.org/10.3390/su14031838.
Ni, N., Liu, Y., & Zhou, H. (2022). Financial openness, capital rents and income inequality. European Journal of Political Economy, 71, 102077. https://doi.org/10.1016/j.ejpoleco.2021.102077.
Ozili, P. K. (2018). Impact of digital finance on financial inclusion and stability. Borsa Istanbul Review, 18(4), 329-340. https://doi.org/10.1016/j.bir.2017.12.003.
Ozili, P. K. (2021). Digital Finance, Green Finance and Social Finance: Is thera a Link?. Financial Internet Quarterly, 17(1), 1-7. https://dx.doi.org/10.2139/ssrn.3786881.
Ren, J. H. (2022). An Empirical Study on the Impact of Digital Inclusive Finance on Urban-Rural Income Gap in the Yellow River Basin. Journal of Henan Normal University (Natural Science Edition), 05, 56-62. doi:10.16366/j.cnki.1000-2367.2022.05.008. (in Chinese)
Song, K., Liu, J. L., & Li, Z. J. (2022). Does the Development of Digital Financial Inclusion Narrows the Urban-rural Income Gap?——Concurrently Discuss the Synergistic Effect between Digital Financial Inclusion and Traditional Finance in Rural Area. China Soft Science, 06, 133-145. DOI: 10.3969/j.issn.1002-9753.2022.06.012. (in Chinese)
Song, X., & Guo, H. (2017). Influence factors of the urban-rural residents’ income gap: A restudy with the digital inclusive finance. In Proceedings of the 2017 4th International Conference on Business, Economics and Management, Qingdao, China, 16-17.
Tang, J., Gong, J., Ma, W., & Rahut, D. B. (2022). Narrowing urban–rural income gap in China: The role of the targeted poverty alleviation program. Economic Analysis and Policy, 75, 74-90. https://doi.org/10.1016/j.eap.2022.05.004.
Tian, Y., & Guo, L. H. (2022). Does Digital Financial Inclusion Alleviate Income Gap? Empirical Evidence from China Panel Studies. Modern Economic Science, 06, 57-70. https://kns.cnki.net/kcms/detail/detail.aspx?dbcode=CJFD&dbname=CJFDAUTO&filename=DJKX202206005&uniplatform=NZKPT&v=64cp1CFHHgCw04DiC_3-segW_YMgHQE7vAURZQD7eEF34YjV8FJgyWl5nP7Uqu5b. (in Chinese)
Wang, Q. J., Feng, G. F., & Chang, C. P. (2005). Financial structure foundation of the urban–rural income gap in China: an investigation from the perspective of the double dual structure. Bulletin of Monetary Economics and Banking, 22(2), 177-194. DOI: 10.21098/bemp.v22i2.
Wang, Y. P., Wei, L. Q., & Luo, J. C. (2022). Development of Digital Inclusive Finance, Income Gap and Rural Economic Growth. Statistics & Decision, 18, 130-135. doi:10.13546/j.cnki.tjyjc. 2022.18.025. (in Chinese)
Yang, C. L., Li, W. Y., & Cao, Q. J. (2022). Digital Inclusive Finance, Credit Supply for Rural Household and Urban-Rural Income Gap. Statistics & Decision , 12, 130-135. doi:10.13546/j.cnki.tjyjc.2022.12.026. (in Chinese)
Yao, L., & Ma, X. (2022). Has digital finance widened the income gap?. PLOS ONE, 17(2), 1-20. https://doi.org/10.1371/journal.pone.0263915
Ye, Y., Chen, S., & Li, C. (2022). Financial technology as a driver of poverty alleviation in China: Evidence from an innovative regression approach. Journal of Innovation & Knowledge, 7(1), 100164. https://doi.org/10.1016/j.jik.2022.100164.
Youxue, J. (2022). How digital finance affects income distribution: Evidence from 280 cities in China. PloS one, 17(5), e0267486. https://doi.org/10.1371/journal.pone.0267486.
Yu, N., & Wang, Y. (2021). Can Digital Inclusive Finance Narrow the Chinese Urban–Rural Income Gap? The Perspective of the Regional Urban–Rural Income Structure. Sustainability, 13(11), 1-18. https://doi.org/10.3390/su13116427.
Zhang, W. L., Zhang, C., & Xuan, Y. (2022). Can Smart City Slow down or Intensify Regional Urban-Rural Income Gap——The Perspective of Digital Inclusive Finance and Urbanization. Inquiry Into Economic Issues, 05, 123-144.https://kns.cnki.net/kcms/detail/detail.aspx?dbcode=CJFD&dbname=CJFDLAST2022&filename=JJWS202205009&uniplatform=NZKPT&v=OSiygZ3YBBvCdIs8qmVP_TfV6VOkOrGkhgDdwpK7cNhnkvswDyX4PLY1TlW_BiJ.(in Chinese)
Zhao, B. Q. (2020). Digital Inclusive Finance and Urban-Rural Income Gap in China. Social Science Journal, 01, 196-205.https://kns.cnki.net/kcms/detail/detail.aspx?dbcode=CJFD&dbname=CJFDLAST2020&filename=SHKK202001022&uniplatform=NZKPT&v=MNNgg6ulI6WaKP-b7AUF-7S5jw4ZQj0bAtDAp3liEc09A6hvhAsiagCaO6Fui2lu (in Chinese)
Zhao, H., Zheng, X., & Yang, L. (2022). Does Digital Inclusive Finance Narrow the Urban-Rural Income Gap through Primary Distribution and Redistribution?. Sustainability, 14(4), 1-19. https://doi.org/10.3390/su14042120.
Zhong, K. (2022). Does the digital finance revolution validate the Environmental Kuznets Curve? Empirical findings from China. PLOS ONE, 17(1), 1-19. https://doi.org/10.1371/journal.pone.0257498.
Zhong, S., Wang, M., Zhu, Y., Chen, Z., & Huang, X. (2022). Urban expansion and the urban–rural income gap: Empirical evidence from China. Cities, 129, 103831. https://doi.org/10.1016/j.cities.2022.103831.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Zhe Zhang
This work is licensed under a Creative Commons Attribution 4.0 International License.