Abstract

This study examines the impact of digital financial inclusion (DFI) on household entrepreneurship and the role of the traditional finance system (TFS). The results show that a 1% increase in DFI increases entrepreneurship by 0.264%. Improved willingness to borrow and financial literacy enhance DFI's effect. DFI and TFS have a willingness to borrow competitive relationship but a financial literacy synergistic relationship. The DFI-TFS relationship exhibits heterogeneity based on the rural–urban divide, bank types, and entrepreneurial motivations. These findings offer insights into the interplay between DFI and TFS in promoting household entrepreneurship.

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