How does digital financial inclusion promote the development of agricultural modernization?

Improving agricultural green total factor productivity is important for achieving high-quality economic development and the SDGs. Digital inclusive finance, which combines the advantages of digital technology and inclusive finance, represents a new scheme that can ease credit constraints and information ambiguity in agricultural production. First, this study focused on agro-ecological functions; we incorporated total agricultural carbon sequestration and emissions extraction into the evaluation system and used the mixed-direction-distance function to calculate agricultural green total factor productivity. Then, based on panel data from 31 provinces in China collected from 2011 to 2021, we used the two-way fixed effect model, the interactive fixed effect, and the plausibly exogenous variable method to test the impact of digital financial inclusion on agricultural green total factor productivity, and its mechanism of action. The panel-corrected standard error and fixed effect Driscoll–Kraay methods were used to account for the unobserved heterogeneity and cross-section dependence in the panel data. The results showed that digital financial inclusion can significantly improve agricultural green total factor productivity. This conclusion remained valid following robustness tests using the spatial econometric model and the method of changing explanatory variables. Digital financial inclusion can improve agricultural green total factor productivity by facilitating the transfer of agricultural land. Sound digital infrastructure and strict green credit policies enhance the role of digital inclusive finance in promoting the green development of agriculture. These conclusions could help the financial sector to formulate flexible, accurate, reasonable, and appropriate financial policies and products that would support agriculture, and enhance the role of digital inclusive finance in promoting sustainable agricultural development.

Improving agricultural total factor productivity is crucial for comprehensive rural revitalization and building a strong agricultural nation. Digital inclusive finance amalgamates the benefits of digital technology and inclusive finance, mitigating financial exclusion in agricultural production. It fosters rural revitalization and the modernization of agriculture by bolstering farmers' innovation, entrepreneurship, and agricultural technology advancements. Consequently, it significantly enhances overall agricultural total factor productivity. This study uses panel data from 2011 to 2020 to empirically investigate the impact and mechanism of digital inclusive finance on agricultural total factor productivity in Zhejiang Province, China. The research results show that digital inclusive finance significantly enhances agricultural total factor productivity in Zhejiang Province, which holds true even after a series of robustness tests. Analysis of the mechanism reveals that the integrated development of rural industries plays a crucial mediating role in empowering agricultural total factor productivity through digital inclusive finance. Furthermore, heterogeneity analysis indicates that the positive effect of digital inclusive finance on agricultural total factor productivity is more pronounced in the northeastern region of Zhejiang Province and in areas ranked in the second tier of agricultural development. Therefore, we recommend comprehensively enhancing the development of digital inclusive finance in rural areas, fostering a financial ecosystem that integrates rural industries, promoting the coordinated development of digital inclusive finance in different regions, and comprehensively improving agricultural total factor productivity.

In the process of financial development, the high threshold and credit asymmetry not only increase the difficulty and cost of financing in rural agriculture, but also hinder the upgrading of agricultural industrial structure and delay the development of agricultural modernization. With the development of information technology and the wide application of big data, digital inclusive finance has become an important path and inevitable choice to promote the upgrading and modernization of China's agricultural industrial structure. The project intends to use the entropy method to measure the development level of agricultural modernization; Based on the two-way fixed effect model, the paper explores the effect of digital inclusive finance on agricultural modernization. With the help of the intermediary effect model, this paper explores the internal mechanism of the influence of the digital inclusive financial policy on the development of rural modernization from the level of "the upgrading of agricultural industrial structure". Based on the empirical results, this paper analyzes the heterogeneity of the effects of digital financial inclusion policies from the two dimensions of rural location and rural characteristics, and explores an effective path to promote digital financial inclusion and industrial upgrading in rural areas with prominent internal differences, with a view to providing reference and basis for the formulation and implementation of future digital financial inclusion and agricultural modernization development policies.

IntroductionIn order to achieve the sustainable development goal set by the United Nations,it is necessary to promote the green transformation and sustainable development of agriculture. In the context of the global economic digital revolution, examining the impact of digital financial inclusion (DFl) on agricultural green total factor productivity (AGTFP) provided a new perspective for DFl to promote agricultural transformation and upgrading.MethodsBased on balanced panel data for 30 provinces in China from 2011 to 2022, the study used the slack-based measure (SBM) and global malmquist-luenberger (GML) index to measure AGTFP. Then the entropy method was used to measure the basic condition of digital logistics. Finally, causal relationship and potential mechanism of DFI on AGTFP were verified by means of bidirectional fixed effect and two-stage least square method.ResultsOur findings are as follows: firstly, DFl significantly increases AGTFP. This conclusion is still valid after a series of robustness tests and endogeneity control. Secondly, land transfer and digital logistics play positive mediating roles in the relationship between DFl and AGTFP. Thirdly, DFl has a higher impact on AGTFP in main grain-producing areas and the production-marketing balanced areas.DiscussionThis research provides not only theoretical and empirical support for optimizing China’s digital inclusive financial service system and promoting the green development of agriculture but also an important reference for the agricultural development of developing countries.

With the deep integration of digital technology and inclusive finance, digital inclusive finance has provided a new opportunity for agricultural high-quality development through “overtaking on curves”. This article empirically examines the impact of digital inclusive finance on agricultural high-quality development and the dynamic mechanism of land circulation in its transmission process, utilizing panel data from various provinces in China from 2011 to 2021. The research indicates that digital inclusive finance has a significant improvement effect on agricultural high-quality development, and this conclusion remains valid after a series of endogenous treatments and robustness tests. Meanwhile, intelligent manufacturing has a more pronounced role in promoting agricultural high-quality development in China’s eastern regions, regions with sound infrastructure, and regions with high environmental regulation intensity. Further research reveals that digital inclusive finance can promote agricultural high-quality development through the mechanism of promoting land circulation. The research conclusions provide important empirical evidence and policy implications for achieving coordinated development of agricultural economic growth and environmental protection, thereby realizing the beautiful vision of comprehensive rural revitalization.

Agricultural green development plays a crucial role in addressing the conflict between agricultural production and ecological environmental protection. This study aims to analyze the impact and mechanisms through which digital inclusive finance influences agricultural green development, providing empirical evidence to support the role of digital inclusive finance in promoting sustainable agricultural practices. Using panel data from 30 provinces (cities and districts) in China spanning from 2011 to 2020, this study measures regional agricultural green development levels using the entropy power method. By clarifying the theoretical mechanisms behind the relationship between digital inclusive finance and agricultural green development, this research employs panel fixed effects, mediation effects, and threshold regression models to empirically examine the impact of digital inclusive finance, specifically its coverage breadth, usage depth, and digitization level, on agricultural green development. Furthermore, this study explores the threshold effects of digital inclusive finance on agricultural green development. The findings from this study indicate that digital inclusive finance significantly contributes to agricultural green development, with a double-threshold effect observed as follows: when digital inclusive finance surpasses critical thresholds, its impact on agricultural green development intensifies. This result remains robust after conducting a series of endogeneity and robustness tests. The mechanism analysis reveals that digital inclusive finance drives agricultural green development by fostering technological innovation and increasing farmers’ income. Heterogeneity analysis further demonstrates that digital inclusive finance has a substantial impact on agricultural green development in eastern China compared to the central and western regions. Consequently, this study suggests that digital inclusive financial services should be further expanded and deepened to foster the integration of financial services with agriculture, creating a sustainable development model that promotes shared prosperity and effectively supports the green development of agriculture.

The influence of digital financial inclusion on medical insurance systems has drawn significant attention. However, its impact on China's multilevel medical insurance system (MMIS) remains uncertain. The MMIS is crucial for societal wellbeing. It safeguards citizens from financial hardships during medical treatment, especially as the population ages and healthcare costs rise. By covering medical expenses, the MMIS ensures equal access to essential medical services, protecting people's health rights and preventing impoverishment caused by medical expenses, thus promoting social stability and equity. This study used panel data from 31 provinces in China from 2016 to 2020 to explore the impact of digital financial inclusion on the development of the MMIS. An MMIS development matrix was constructed using the entropy weight method and the Technique for Order Preference by Similarity to an Ideal Solution (TOPSIS). Panel data regression models were employed to analyze the effects of different dimensions of digital financial inclusion on the MMIS. The overall digital financial inclusion index, particularly the "coverage" dimension, had a significant positive and significant impact on the MMIS (p < 0.05). However, the "depth" and "digitization" dimensions were statistically insignificant (p > 0.1). Robustness checks using lagged instrumental variable approaches and double machine learning (DML) methods confirmed the stability of these findings. Heterogeneity analysis using the causal forest model revealed that digital financial inclusion had a more pronounced effect in central and western regions. Its impact in the eastern regions was relatively weaker, highlighting significant regional disparities. Digital infrastructure in the central and western regions must be strengthened to enhance financial inclusion coverage and service capacity; the depth and quality of financial services in the eastern regions should be improved to optimize the effects of digital finance on the MMIS. Deeper integration between digital financial inclusion and the MMIS should be prompted through technological innovations to improve both equity and sustainability. This study provides valuable insights for policymakers to address regional disparities in further developing the MMIS.

With its distinct advantages in digital technology, digital financial inclusion has opened new avenues for the growth of China's foreign trade. It has emerged as a vital and indispensable force in driving the sector's advancement. Based on panel data from 30 provinces in China from 2011 to 2022, this paper explores the impact of digital financial inclusion on China's foreign trade development. The findings demonstrate that digital financial inclusion significantly contributes to the growth of China's foreign trade. Moreover, marketization and stronger financial supervision further amplify its positive impact. A deeper analysis reveals that digital financial inclusion has a more pronounced effect in the central and western regions compared to the eastern region. Additionally, the breadth of coverage, depth of services, and level of digitization in digital financial inclusion all play a crucial role in accelerating the development of China's foreign trade. In light of these findings, the Chinese government should prioritize the advancement of digital financial inclusion by strengthening supportive policies and enhancing the legal framework. By doing so, it can fully leverage digital financial inclusion’s potential to drive the growth of China’s foreign trade.

This paper aims to examine the complex relationship between digital financial inclusion, monetary policy transmission, and economic development in 18 Sub-Saharan African countries from 2004 to 2021. The study utilizes panel data and employs a digital financial inclusion index, broad money growth, and real gross domestic product per capita as proxies for digital financial inclusion, monetary policy transmission, and economic development, respectively. The panel autoregressive distributed lag model results uncover a bi-directional causality between economic development and digital financial inclusion, emphasizing the pivotal role of digital financial inclusion in fostering economic development. Additionally, another bi-directional causality between digital financial inclusion and monetary policy transmission highlights their interdependence. Unidirectional causality from monetary policy transmission to economic development is also established. This study emphasizes the crucial role of robust measures in enhancing digital financial inclusion to avert adverse consequences, offers nuanced insights into policy dynamics, particularly regarding inflation mitigation, and enhances monetary policy effectiveness. These findings underscore the importance of policy reform, legislation, and regulatory improvements to promote digital financial inclusion by Sub-Saharan African central banks. Strengthening rural financial infrastructure is crucial for driving digital financial inclusion, sustainable economic development, and reducing regional inequalities.

With the deep integration of Internet technology and finance, digital finance has become an indispensable part of inclusive finance and an important driving force for the development of inclusive finance. How inclusive finance affects household wealth under the background of digital penetration has become a hot issue. Based on the advantages of digital finance, this paper compares the differences between traditional and digital inclusive finance, and discusses the mechanism and effect of digital inclusive finance in promoting household wealth.Based on the panel data of China Family Panel Studies（CFPS）, this paper finds that digital inclusive finance helps to increase the level of household wealth, and has greater inclusiveness and a stronger leverage effect than traditional finance. This conclusion is further confirmed by 2SLS test with “geographical distance” as the instrumental variable. Different business types of digital inclusive finance have different promotion effects. Monetary fund, electronic payment and other business types have obvious promotion effects on the overall household wealth. Insurance, credit, online investment and electronic credit also have certain positive effects on the overall wealth, but the impact is small. According to the results of heterogeneity test, the effect of digital inclusive finance on household wealth in the central and western regions is stronger than that in the eastern regions; the role of digital inclusive finance in promoting the increase of household wealth depends on the family’s education level and understanding ability, and has a stronger role in promoting the families with high education level and high understanding ability. The degree of digitalization has a significant negative impact on the overall household wealth, which may be related to the phenomenon of “digital exclusion” in digital inclusive finance. Digital exclusion may weaken the role of digital inclusive finance in promoting the growth of household wealth to a certain extent.The research shows that in order to play the positive role of digital inclusive finance in benefiting the real economy and promoting the growth of household wealth, government departments should promote the deep integration of digital finance and traditional finance, give full play to the respective advantages and characteristics of digital finance and traditional finance, and build a complementary and mutually reinforcing financial service system.This study expands the existing research in three aspects: First, based on the background of digital penetration into the financial field, it examines the mechanism and function of digital inclusive finance on household wealth. Second, it compares and tests the differences between digital inclusive finance and traditional inclusive finance in promoting household wealth. Third, it tries to use geographical distance as an instrumental variable to overcome endogeneity and carry out comprehensive heterogeneity analysis.

Over the past four decades of reform and opening up, China's economy has achieved a high average annual growth rate of over 9 per cent, becoming the second largest economy in the world. At the same time, China's financial reform and development has been continuously optimized, and the financial industry has maintained rapid development. With the accelerated integration of new-generation digital technology and inclusive finance, the flourishing development of inclusive finance has added strong momentum to the financial services economy. Based on the relevant research literature on inclusive finance at home and abroad and the characteristics of digital finance, we constructed the evaluation index system of cross-country digital inclusive finance level and the evaluation index system of provincial digital inclusive finance level, and evaluated the development level of digital inclusive finance in 31 provinces (municipalities directly under the central government) in China. On this basis, the impact of digital financial inclusion on economic growth is comprehensively analyzed from two perspectives (temporal and spatial dimensions) and two levels (cross-country and provincial levels), and the empirical evidence is analyzed from the temporal dimension by using traditional econometric analysis methods. The increase in the level of digital inclusive finance in a region has a significant contribution to the region's economic growth, and the mediating effects of credit constraints, entrepreneurship, investment and urban-rural income gap between digital inclusive finance and economic growth are proposed and verified through the decomposition of the direct-indirect effects and heterogeneity of the spatial Durbin model. Policy recommendations are proposed through relevant research results to help China's further economic development.

The use of digital technology by banks and other financial institutions to facilitate financial inclusion is referred to as digital financial inclusion. This fusion of digital finance and traditional banking methods has the potential to impact banks' operational effectiveness. This study uses the panel effects model to examine the link between digital financial inclusion and bank performance in 30 Chinese provinces from 2012 to 2021. This research uses kernel density estimation to examine the spatial-temporal growth patterns of both variables. The mediator variable in examining how digital financial inclusion affects bank performance is risk-taking. Finally, the paper analyses the regional heterogeneity of the impact. It presents the following conclusions: (1) In China, digital financial inclusion and bank performance have constantly increased, with noticeable regional variances in their development levels. This regional inequality has widened gradually since 2018, yet it has not resulted in polarization. (2) The significant positive correlation between digital inclusive finance and banking performance indicates that banking performance tends to increase with the enhancement of digital inclusive finance. (3) Digital financial inclusion impacts bank performance, with risk-taking as a moderator. The spread of digital financial inclusion services enhances banks' willingness to take risks, enhancing overall efficiency. (4) Digital financial inclusion boosts bank performance in the Northwest, South, North, and East regions while lightly inhibiting it in the Central region. Based on the findings, this study makes bank and government suggestions.

Digital financial inclusion is critical for achieving higher economic growth, sustainable development, and a more financially inclusive nation. Additionally, digital financial inclusion is vital for stabilizing the Islamic banking industry during the COVID-19 epidemic, leveraging its resistance to financial shocks, and fostering financial inclusiveness. Islamic banks are usually considered because of their significant ability to counter financial crises and their prominent contribution to financial landscape. This study investigated the digital financial inclusion and Islamic banking stability nexus using unbalanced panel data from 65 Islamic banks from six countries from 2010 to 2021. This study uses a GMM approach and a Z score. The finding implies that the default risk of the banks in the analyzed area is reduced due to the increased stability of Islamic banking brought about by the broader application of digital financial inclusion. Digital financial inclusion is more strongly correlated with banks' financial soundness. Access to banking services, made possible by digital financial inclusion, also dramatically improves banking stability and makes banks more resilient. Moreover, incorporating digital financial inclusion into Islamic banking promotes inclusive economic development, which may help the industry weather crises like the present COVID-19 epidemic. This study lays out the policy implications that increasing bank stability, bolstering financial literacy, and combining digital financial inclusion with other strategies to keep banks viable.

Khera et al. (2022) provides a novel measurement of digital financial inclusion using a three-stage principal component approach (PCA) for 52 emerging market and developing economies. Based on this new index, they have found that the adoption of digital financial services has been a key driver of financial inclusion, and countries/regions in Africa and Asia and regions have achieved greater progress. They also warn against a digital divide and call for policies to close the gap. The novelty of this new index rests on three characteristics: it is focused; it is comprehensive, and it utilizes the PCA approach. This index focuses on the payment aspects of financial inclusion, and considers the “access” and “usage” aspects of both digital and traditional aspects of financial inclusion. The three-stage PCA approach first extracts the supply-side and demand-side aspects of financial inclusion for both traditional and digital financial services, then extracts the principal components of the access and usage indices for the traditional and digital financial inclusion, respectively, and finally builds up a comprehensive index encompassing all these subcomponents. The constructed index provides a good chance to measure the level of the adoption of digital financial services in a specific country, and hence provides an instrument for evaluating the policy implications of financial inclusion, especially digital financial inclusion. For example, the subindex provides a chance to evaluate the severeness of the digital divide and the risk of financial exclusion. The indices show wide variations in digital financial inclusion across countries, whether it is mainly driven by a reluctance in constructing more digital financial infrastructure due to financial constraints, or a distrust of digital technology will need further investigation. Overall, this index has great potential for deepening our understanding of the relationships between comprehensive financial inclusion, digital financial inclusion as well as traditional financial inclusion. In this aspect, Khera et al. (2022) may wish to provide more discussions so that the importance of subindices can be better appreciated. For example, Khera et al.’s Figures 1 and 2 indicate that African countries excel in digital financial inclusion, so it would be insightful to explain which of the access and the usage components are relevant in promoting the development in digital financial inclusion. Another example is Khera et al.’s Figure 3 that contains the interesting finding, namely, for countries with low traditional financial inclusion, the variance of traditional financial inclusion is larger than the variance of countries with high-traditional financial inclusion. This implies that efforts in pursuing digital financial inclusion vary more in countries with low levels of traditional financial inclusion. Some additional empirical evidences may also help to convince readers about the validity of this index. For example, Khera et al.'s (2022) Figure 3 ranks Mongolia as the most advanced country in terms of both comprehensive as well as digital financial inclusion, and their Figure 4 shows that Ghana ranks No. 1 in improvements of digital financial inclusion. Presentations of some statistics about access and usage, and the development in traditional financial inclusion between 2014 and 2017 of these two countries would be helpful. Some robustness checks may also help readers and users to appreciate the importance of this index. For example, one way to construct the index is to apply the PCA approach to all the variables in one stage instead of in three stages. Such a strategy can avoid the prediction errors caused by treating the first-stage and second-stage indices directly as raw data, and can also provide readers with a broader view about the financial inclusion status quo.

The issue of farmers’ income is a widespread concern in countries worldwide, and the Chinese government has always prioritized promoting the sustainable growth of farmers’ income. The development of digital financial inclusion provides a new opportunity for farmers’ income to achieve sustainable growth. With the implementation of digital financial inclusion, whether it can effectively promote farmers’ income growth deserves in-depth study. Based on the panel data from 30 provinces in China from 2011 to 2021, this study uses a dual fixed effects model to empirically analyse the impact of digital inclusive finance on farmers’ income and further analyses the impact of various dimensions of digital financial inclusion on farmers’ income. From a policy perspective, the DID (difference in differences) method is used to analyse, in general, the impact of the implementation of digital financial inclusion policies on farmers’ income and, in particular, the impact of such inclusion on farmers’ income from the perspective of income structure. The results of this study show that digital financial inclusion can significantly promote farmers’ income growth. The dimensions of the breadth of coverage and depth of use can significantly contribute to the increase in farmers’ income, whereas digitization has a negative effect on this increase. Furthermore, the DID results show that digital financial inclusion policy implementation has a significantly positive effect on farmers’ income growth, that is, it can significantly contribute to their wage income, can contribute to family operating income but at a low level of significance, and does not significantly contribute to their property income. Moreover, regional heterogeneity analysis demonstrates that the marginal contribution of digital financial inclusion to the growth of farmers’ income in the eastern region is less than that in the central and western regions. Therefore, the development of digital inclusive finance in rural areas should be vigorously promoted in order to provide high-quality financial services and achieve sustainable growth in farmers’ incomes.