The impact of digital finance on the rate of return of China's substantial economy

Abstract

At present, along with the reform and progress of science and technology, the digital financial industry is booming in our country, which has had a profound impact on economic development, industrial production and other aspects. At the same time, the substantial economy is confronted with challenges of transformation and a series of demands for high-quality development. Therefore, it is necessary to speed up the integration between digital finance and the substantial economy, and form a benign mutual promotion while mastering the effects of the two, so as to promote economic transformation and upgrading. Using panel data of 30 provinces, municipalities and autonomous regions in mainland China from 2011 to 2020 and digital financial Inclusion index released by the Digital Finance Center of Peking University, this paper focuses on the impact of digital finance on the return rate of China's substantial economy. The study found that there is a significant U-shaped relationship between the two, and different dimensions of digital finance have different effects on the return rate of the substantial economy. At the same time, there is regional heterogeneity in the impact of digital finance on the return rate of the substantial economy, with the most obvious inhibitory effect on the central and western regions. Based on the above conclusions, this paper also provides certain policy suggestions for the high-quality development of digital finance and the substantial economy.