Research on the Impact of Digital Financial Inclusion on Urban-rural Residents’ Consumption Gap Based on an Econometric Model

Abstract

Using a static panel analysis model, a logistic regression model, and a dynamic panel analysis model, respectively, the related relationship between the digital financial inclusion index and the urban-rural residential consumption gap is investigated based on the provincial panel data of 31 provinces (autonomous regions) in China from 2015 to 2019. It is found by the study that the increase in digital financial inclusion index significantly contributes to bridging of the urban-rural residential consumption gap, despite heteroskedasticity and endogeneity. Meanwhile, the increase of urbanization rate and the positive government intervention also contribute to the reduction of this gap, while the upgrade of industrial structure and the expansion of economic openness will hinder the reduction of this gap but the results are not significant. The findings of the study provide a reasonable path to effectively alleviate the Chinese urban-rural residents’ consumption gap, and lay a theoretical foundation for further solving the real problem of urban-rural unbalanced development.