Abstract
This paper examines how digital finance mitigates the resource curse effect in China's resource-based cities. In order to mitigate the resource curse effect, the transformation and modernization of the digitally enabled financial industry have enhanced the allocation of financial instruments and stimulated economic growth. This paper empirically selects data from 2011 to 2019 from 219 Chinese prefecture-level cities (88 of which are resource-based cities) to construct a model for econometric analysis. The results indicate that: (1) The resource curse effect of resource-based cities in China is significant, and digital finance mitigates this effect effectively. (2) The two-step mediating effect test demonstrates that digital finance promotes financial deepening, financial expansion, and financial efficiency, optimizes the efficiency of urban capital allocation, alleviates enterprise financing constraints, and ultimately drives economic growth. (3) The aforementioned conclusions still prove valid after selecting geographic data as instrumental variables and G20 summit as exogenous policy shocks. This study explores the role of new finance in the resource curse effect in the digital era and provides a reference for comprehending the mechanism by which digital finance drives economic growth.
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