Abstract
Digital inclusive finance (DIF) has emerged as a powerful tool for promoting economic development and eliminating regional imbalances. Many studies have discussed different approaches to expand the coverage rate and increase the participation rate of DIF in developing countries. This study employs a binary choice model with rational heterogeneous expectations utilizing data from CHFS to examine the impact of peer effects on DIF participation choices in rural China. The findings indicate that peers' participation choices in DIF have a positive impact on the individual's participation choices in DIF, primarily through an information transmission mechanism. Moreover, the regional economy effects are explicitly demonstrated since the progress of DIF in more advanced communities may produce a unidirectional spillover effect on less advanced communities. Based on these results, policy implications are recommended to enhance financial education and construct financial wellness programs.
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