The Impact of Inclusive Financial Development and Economic Development Level on Rural Residents’ Income

Abstract

In recent years, China has implemented national wide policy to promote the inclusive fi nancial (IF) services. Such promotion policy is a key measure to help the rural people to alleviate poverty and increase income. Further the policy provides strong support for the implementation of the rural revitalization strategy. First, this study applies a fi xed effect model to test whether the development of inclusive fi nance can increase the rural residents’ income, by analyzing the panel data of 31 provinces from 2011 to 2018. Second, this study further investigates whether “Inclusive Finance Development Plan (2016-2020) ”and the subsequent measures can strengthen the role of inclusive fi nance in promoting rural residents’ income. Last, this study investigates whether economic development can alter the relationship between the development of inclusive fi nance and the income of rural residents. Evidence suggests that the national promoting policy has signifi cantly strengthened the impact of inclusive fi nance on improving rural area income. Also the development of inclusive fi nance has a stronger impact on rural residents’s income in the lower economic development areas than that in the higher economic development areas. Further robustness check on the conclusion is conducted via quantile regression.