Can digital finance promote individuals’ charitable giving? Empirical evidence from China

Abstract

Charitable giving has become increasingly important in achieving common prosperity, and individual charitable donations have gradually increased in China. This paper utilizes data from the China Family Panel Studies (CFPS) 2018 and the Digital Financial Inclusion Index to explore how digital finance impacts individuals' charitable giving behavior in the context of common prosperity. Our empirical studies suggest that digital finance could promote the amount of individual charitable giving and the likelihood of donation behavior. Furthermore, heterogeneity studies show that digital finance increases the amount of charitable giving by residents in rural areas, the eastern region, and those who receive government subsidies more significantly. The mechanism behind this is that digital finance promotes charitable giving by increasing residents' income, income volatility, and internet usage. Based on these conclusions, we provide policy recommendations to achieve common prosperity through the use of digital finance and charitable giving.