The Impact of Digital Financial Inclusion on the Level of Agricultural Output

Abstract

The development of digital inclusive finance has alleviated the problem that traditional finance cannot fully cover rural areas, provided convenient services for Chinese farmers, and solved the problem of “difficult and expensive loans” in agricultural development. This paper used the panel data of Beijing University’s Digital Inclusive Finance Index and 31 provinces and cities in China from 2011 to 2020, and adopted the double-fixed-effect and panel threshold model to study the impact of the development of digital inclusive finance on the level of agricultural output and its internal mechanism. The study found that digital inclusive finance can significantly improve the level of agricultural output, and there is a double threshold for the impact of digital inclusive finance on the level of agricultural output. The heterogeneity analysis showed that the coverage and depth of digital inclusive finance can significantly improve the level of agricultural output, and the depth of use plays a greater role. Digital inclusive finance has significantly improved the level of agricultural output in the midwest regions and major agricultural provinces, but its impact on the eastern regions and non-agricultural provinces is not significant. Finally, the mechanism analysis found that digital inclusive finance can improve the level of agricultural output by promoting the level of agricultural mechanization and improving farmers’ willingness to participate in insurance. Therefore, we should continue to promote the development of digital inclusive finance according to local conditions.