The impact of digital financial inclusion on China's regional disparities in the quality of economic development: Based on the relational data paradigm

Abstract

This study constructs a multi-dimensional evaluation system for the quality of economic development (QED) and measures the QED in 30 provinces of China from 2012 to 2021. The results show that both QED and digital financial inclusion (DFI) exhibit significant differences across space and time. Specifically, QED and the development level of DFI are higher in eastern regions compared to central and western regions of China. Additionally, while regional disparities in DFI show an upward tendency, they are trending downward in QED. Based on the analytical paradigm of relational data, this research investigates the influence of DFI on regional disparities in QED using econometric models of relational data and the quadratic assignment procedure. This research finds that: (1) Regional differences in DFI, including breadth of coverage and depth of usage, positively impact regional disparities in QED when looking at the full sample. (2) Analyzed by region, DFI's regional disparities positively influence QED's regional disparities in the eastern and western regions of China. (3) Compared across years, the impact intensity of DFI on regional disparities in QED exhibits an overall rising trend, with depth of usage rising the most, while the impacts of coverage breadth and digitization degree weaken. This study not only promotes the understanding of the relationship between DFI and QED, but also provides a policy reference for narrowing regional development disparities, promoting coordinated development, and improving the quality of economic development.