Digital Financial Inclusion Research Articles

Impact of digital inclusive finance on agricultural total factor productivity in Zhejiang Province from the perspective of integrated development of rural industries.

Improving agricultural total factor productivity is crucial for comprehensive rural revitalization and building a strong agricultural nation. Digital inclusive finance amalgamates the benefits of digital technology and inclusive finance, mitigating financial exclusion in agricultural production. It fosters rural revitalization and the modernization of agriculture by bolstering farmers' innovation, entrepreneurship, and agricultural technology advancements. Consequently, it significantly enhances overall agricultural total factor productivity. This study uses panel data from 2011 to 2020 to empirically investigate the impact and mechanism of digital inclusive finance on agricultural total factor productivity in Zhejiang Province, China. The research results show that digital inclusive finance significantly enhances agricultural total factor productivity in Zhejiang Province, which holds true even after a series of robustness tests. Analysis of the mechanism reveals that the integrated development of rural industries plays a crucial mediating role in empowering agricultural total factor productivity through digital inclusive finance. Furthermore, heterogeneity analysis indicates that the positive effect of digital inclusive finance on agricultural total factor productivity is more pronounced in the northeastern region of Zhejiang Province and in areas ranked in the second tier of agricultural development. Therefore, we recommend comprehensively enhancing the development of digital inclusive finance in rural areas, fostering a financial ecosystem that integrates rural industries, promoting the coordinated development of digital inclusive finance in different regions, and comprehensively improving agricultural total factor productivity.

Analysis of the Effect of Digital Financial Inclusion in Promoting Inclusive Growth: Mechanism and Statistical Verification

Abstract As the main goal of economic development, inclusive growth (IG) is an important strategic measure to achieve common prosperity. Whether digital inclusive finance can make use of the advantages of scientific and technological innovation to promote IG is of great significance to promote the fairness, effectiveness, and inclusiveness of global development. Based on the panel data of 30 provinces in China from 2011 to 2021 (excluding Tibet, Hong Kong, Macao and Taiwan), this article first measures the IG index of China from three dimensions: sustainable economic growth, income distribution, and social equity. Subsequently, the article uses a series of mathematical statistical models to verify the transmission path and mechanism of the influence of digital inclusive finance on IG. The findings are as follows: (1) The level of IG in China shows a decreasing trend from east to middle to west, while the average annual growth rate of IG in the eastern region is obviously lower than that in the central and western regions; (2) digital inclusive finance has a significant promotion effect on IG, and digital inclusive finance in the central and western regions has a more obvious promotion effect on IG; (3) digital inclusive finance can achieve IG by increasing innovation activity and improving the level of human capital. Finally, based on the research conclusions, the article puts forward relevant policy suggestions, which provide reference value for formulating high-quality national development strategies and promoting high-quality economic development.

Carbon reduction effects of digital financial inclusion: Evidence from the county-scale in China

All countries in the world are faced with varying degrees of environmental pollution problems and carbon reduction responsibilities. In the case of China, digital transformation emerges as a new growth catalyst for the future economy and a pivotal avenue for optimizing resource allocation, enhancing energy structure, and reducing energy dependence for development. Therefore, this study delves into the carbon reduction effect of digital financial inclusion and explores its pathways. It focuses initially on the counties of the Yangtze River Delta in China, utilizing nighttime light data to estimate carbon emissions and scrutinizing the spatial and temporal distribution characteristics of emissions. Empirical results reveal that digital financial inclusion positively influences carbon emission reduction, with notable spatial and temporal variations in the emission reduction effect. Furthermore, the study uncovers that digital financial inclusion contributes to reducing carbon emissions through the optimization of industrial structure and the promotion of technological innovation. These research findings offer a scientific foundation for guiding the government in developing digital finance to attain local carbon emission reduction targets. Concurrently, local governments should leverage the role of digital financial inclusion in optimizing industries and driving technological innovation to propel the low-carbon, sustainable development of China.

Economic Empowerment: The Role of Digital Financial Inclusion in Boosting Gross National Income in Upper-Income Countries

The objective of this study is to examine the impact of the digital financial inclusion index on Gross National Income per Capita in upper-income countries. Using the Principal Components Analysis (PCA) method, the study has constructed a digital financial inclusion index with the data collected from the World Development Indicator for the years 2011–2021. Further, utilizing the Generalized Moments of Method (GMM) technique, the findings reveal a significant positive effect of the digital financial inclusion index on income levels, emphasizing the importance of inclusive financial systems for broader economic participation. Additionally, bank branches remain important, highlighting their complementary role alongside digital services. Moreover, savings significantly contribute to economic growth and stability. Lastly, ATMs play a positively significant role in raising economic development and increasing income levels. Policymakers should prioritise initiatives that enhance digital financial inclusion, strengthen traditional banking infrastructure, and encourage savings. Additionally, investments in accessible banking services, such as ATMs, can significantly contribute to advancing economic development and increasing income levels.

Does digital financial inclusion forecast sustainable economic growth? Evidence from an emerging economy

The emergence of digital financial inclusion has initiated a debate about whether it is the next frontier of sustainable economic growth, especially for developing economies. This study aims to verify these contentions by examining the impact of digital financial inclusion on sustainable economic growth. Accordingly, we created automated teller machines and debit card holders (Debit) as the proxies of digital financial inclusion and examined their impact on sustainable economic growth through the proxies of gross domestic product (GDP) growth and carbon dioxide (CO2) emissions. The empirical data between 2011 and 2020 was retrieved from Indonesia and was analyzed using the generalized method of movements (GMM) technique. The findings confirm that digital financial inclusion’s proxies (automated teller machines and Debit) have a significant positive (strong) effect on GDP growth and a significant positive (moderate) effect on CO2 emissions. This study may motivate developing countries to accelerate their digital financial inclusion initiatives to achieve sustainable economic growth.

“Booster” or “Obstacle”: Can digital transformation improve energy efficiency? Firm-level evidence from China

To identify the influence of digital transformation on energy consumption, this paper introduces digitalization and energy elements into the multi-sector energy efficiency analysis model. Furthermore, this paper empirically tests the influence of digital transformation on energy efficiency from the micro level. The results show that the digital transformation indeed improves the enterprises energy efficiency, in which enterprises with higher energy efficiency are more affected. The improvement effect of digital transformation on enterprise energy efficiency continues to increase over time. In comparison, digital transformation shows more effective improvement effect on energy efficiency in enterprises that substantive transformation priority, with same group and maturity stage. Mechanism analysis shows that digital transformation can improve the energy efficiency of enterprises by reducing costs, increasing income, improving production efficiency and promoting technological innovation. In addition, the digital inclusive finance, government subsidies, intellectual property protection and service industry opening show positive regulatory effects. This paper proposes that, with the goal of peak carbon dioxide emissions and carbon neutrality, enterprises should actively increase digital investment and strengthen digital management of energy utilization.

Exploring the impact of carbon finance policy on photovoltaic market development – An experience from China

Solar energy is one of the most promising clean energy photovoltaic markets that will play an important role in countries achieving economic decarbonization. A carbon financial policy is an environmental policy that utilizes financial means to reduce carbon emissions. In addition, few existing studies have used textual analysis to study the impact and mechanism of carbon financial policy on the photovoltaic market development. In order to provide theoretical and empirical support for exploring new paths, modes, and practices of carbon financial policies to promote the development of the photovoltaic market, this paper empirically analyzes the impacts and heterogeneity of carbon financial policy on photovoltaic market development based on authoritative policy perspectives with the data of 30 provinces in China from 2015 to 2021 as the research samples and explores the mechanism of its action. The study results show that carbon financial policy positively affects photovoltaic market development, and the conclusion still holds after the robustness test. Meanwhile, there is significant heterogeneity in the effects of carbon financial policies on photovoltaic market development regarding functional positioning, geographic location, economic development, resource endowment, and environmental regulation. As for the mechanism of action, carbon finance policies can promote photovoltaic market development by alleviating financing constraints, increasing innovation vitality, and promoting digital financial inclusion. The breadth of coverage and depth of use positively affect photovoltaic market development, but the degree of digitization does not have a significant effect.

Development of Digital Financial Inclusion in China's Regional Economy: Evidence from Panel Threshold Models

This study aims to investigate the effect of digital financial inclusion and air pollution on economic growth for 31 Chinese provinces between 2003 and 2022 using Panel Threshold Auto-Regressive (PTAR) and Panel Smooth Transition Auto-Regression (PSTAR) models. The results show that there is a nonlinear link between digital financial inclusion and economic growth in China. For PTAR, the LnDFII thresholds are 4.264 (i.e., DFII = 71.094), and for PSTAR are 4.563 (i.e., DFII = 95.871). Below these thresholds, digital financial inclusion significantly boosts economic growth by 0.061 and 0.063 in the PTAR and PSTAR models, respectively. However, above these thresholds, the positive impact diminishes, with coefficients dropping to 0.015 and 0.004 in the PTAR and PSTAR models, respectively. Additionally, both models indicate that digital financial inclusion positively affects reducing air pollution, thereby potentially fostering economic growth. Hence, authorities should strategically implement digital technologies and strengthen collaborative efforts at the regional level to maximize these benefits.

Digital economy development and venture capital networks: Empirical evidence from China

This paper examines the impact of digital economy on urban venture capital (VC) networks constructed from 44,122 inter-city VC events involving 285 cities in China from 2011 to 2019. Specifically, digital infrastructure, digital industry development, digital innovation capacity and digital inclusive finance are identified as four critical dimensions of digital economy. Further, panel regressions reveal that digital economy plays a pivotal role in facilitating the flow of VC resources, and thus positively influencing the agglomeration, radiation, and intermediation of cities embedded in the inter-city VC networks. Further, the results show heterogeneity in the focal impact of digital economy. First, it is stronger in central cities. Second, it follows an inverted-U shape, with the maximum effect observed at approximately 550 km distance between start-ups and investment centers. Third, digital economy has a stronger impact at the seed and start-up stages than at the expansion and maturity stages. These findings have implications for policy-making concerning the development of digital economy and the strategic planning of urban VC networks.

Nexus between digital financial inclusion and economic growth: a panel data investigation of Asian economies

PurposeThis study aims to investigate the relationship between digital financial inclusion and economic growth in specific Asian countries, emphasizing the exploration of how digital financial inclusion dynamics impact gross domestic per capita income.Design/methodology/approachThe study creates a digital financial inclusion composite index (DFII) by incorporating essential metrics from the Global Findex report. Economic growth is measured using Gross Domestic Product per capita income in its natural logarithmic form (LnPCI), with three control variables– employment-to-population ratio; population growth and inflation. The analysis utilizes a fixed-effect dummy variable model to examine the relationship, considering unobserved country-specific heterogeneity. 30 Asian countries have been selected for the study for the periods 2014, 2017 and 2021 based on their availability, as outlined in Table 4.FindingsThe research revealed a robust positive correlation between the Digital Financial Inclusion Index (DFII) and logarithmic GDP per capita income (LnPCI), indicating higher per capita income with enhanced digital financial inclusion. Employment and population exhibited minimal influence, whereas inflation had a notable negative effect on per capita income. Population growth showed a limited impact. The model demonstrated a high explanatory power for the dependent variable (high R-squared), and the residuals displayed low autocorrelation (Durbin–Watson of 1.96).Originality/valueThis study adds to the existing literature by examining the intricate connection between digital financial inclusion (DFI) and economic growth in 30 Asian countries, employing a comprehensive composite index for analysis.

Qualitative Review on Digital Financial Inclusion using N-Vivo

The purpose of this study is to assess the state of research on digital financial inclusion. The method is a qualitative one that makes use of secondary data from articles that were published and indexed by Scopus between 2005 and 2022. This data was processed using Microsoft Excel 16 and analyzed using Nvivo 12 Plus software, which performs automatic coding and classification to create a structured file system. The results of this study suggest that Islamic economic research is beginning to increasingly focus on digital financial inclusion. The majority of the 595 articles that were published claimed that the economy and mobile services are related to digital financial inclusion. “Financial”, “digital”, “inclusion”, “services”, “study”, “development”, “mobile”, “finance”, “technology”, and “economics” are the words that frequently appear with the most frequency in journals with digital financial inclusion subjects. Unusually, there are variations in the sentiment analysis findings. Whereas the sentiment is relatively favorable when it is evaluated based on the title, index keywords, and abstract, the sentiment is quite negative when it is evaluated based on the author keywords. This study is anticipated to contribute to the present academic studies on digital financial inclusion. The results of terms that still have room to grow can be used to guide future studies on digital financial inclusion.

Digital HP finance's role in the economic resilience of enterprises’ digital transformation

To promote digital transformation by enterprises and provide more convenient and efficient financial services, this study analyzes enterprise digital transformation's promotion mechanism and economic influence factors globally and clarifies the role of inclusive digital finance in self-regulation and reducing financing difficulties during enterprise transformation. Finally, an economic resilience model is constructed to select parameters of economic factors, refined into two dimensions: enterprise transformation ability and enterprise upgrading ability. The digital economy is found to be conducive to improving the gross profit margin of enterprises with a significance greater than 0. A regression analysis shows that the estimated coefficients of the digital financial inclusion index, breadth of coverage, and depth of use are all significantly positive, and the different nature of the firms passes the significance test at the 1 % level. Thus, inclusive digital finance reduces the business risk of digital transformation and promotes the development of enterprises in the direction of specialization and innovation.

Impact and Mechanism of Digital Inclusive Finance on the Urban–Rural Income Gap of China from a Spatial Econometric Perspective

With the rapid development of digital inclusive finance, whether it can lower the income inequality between urban and rural areas has been the focus of policy makers and researchers. Based on China’s 2011–2018 provincial panel data, this paper employs spatial econometric models and mediating-effect models to examine the impact of digital inclusive finance on the urban–rural income gap and its mechanism. The main findings are as follows: First, globally, the urban–rural income gap and digital inclusive finance each exhibit significant positive spatial correlation; locally, the income gap primarily exhibits spatial dependence in Central and Western China. Meanwhile, digital inclusive finance transitions from varied agglomeration patterns to exclusively H-H patterns in Eastern China. Second, digital inclusive finance notably reduces the urban–rural income gap, primarily attributed to its expanded breadth of coverage and digitization. Third, mechanism analysis indicates that digital inclusive finance can narrow the urban–rural income gap by increasing labor employment, resulting in higher farmer incomes, rather than through individual entrepreneurship and human capital investment. The findings of this study are crucial for improving digital inclusive financial development and adjusting urban–rural income distribution.

Digital financial inclusion and upgrading of consumption structure: Evidence from rural China

Based on the perspective of spatial economy, this paper focuses on the primary effects and spatial characteristics of Digital Financial Inclusion (DFI) on the upgrading of rural consumption structure (URCS) in China, conducting a literature review and theoretical analysis. It then uses statistical data collected over the years and the Digital Financial Inclusion Index (DFII) of Peking University to prepare panel data for 31 provinces in China (aside from Hong Kong, Macao, and Taiwan) from 2011 to 2020 for empirical testing. The results are as follows: DFI can considerably boost URCS, and there is a strong spatial neighbor impact, that is, it is affected by random shocks in surrounding provinces via its spatial effect; DFI has nonlinear characteristics in the process of fostering URCS, with the threshold variables of income level and family sizes; the impact of DFI on URCS is spatially heterogeneous, and the promotion of the eastern region is better than other zones. These results can inform policymakers about rural development and provide valuable references to push forward rural vitalization.

Income inequality and carbon emissions in Asia: Does financial inclusion matter?

AbstractThe upsurge in the amount of carbon emissions in Asia has been potentially due to the increasing income disparities in the region. Meanwhile, with the increasing level of digital financial services, the digital approach to financial inclusion could complement the traditional approach. Therefore, we investigate the impact of income inequality on carbon emissions across 17 Asian countries for the period 2011 to 2022. We also investigate the effects of traditional and digital financial inclusions on the relationship between income inequality and CO2 emissions. This study employs the panel fixed‐effect estimator, Quantile regressions, and 2SLS to estimate the model specifications of the study. Findings reveal that income inequality has a positive and significant impact on CO2 emissions in both linear and non‐linear models. Findings also show that both traditional and digital financial inclusion significantly moderate the relationship between income inequality and CO2 emissions, with digital financial inclusion having a lesser impact. The study further finds that economic freedom is the transmission channel through which income inequality impacts CO2 emissions, suggesting that higher income disparities lower economic freedom, which further contributes to the amounts of CO2 emissions. Our findings theoretically support the marginal propensity to emit theory and the environmental Kuznets curve hypothesis. Our findings are robust to alternative measures of income inequality, CO2 emissions, and endogeneity concerns.

Impact of digital finance on corporate green innovation: Exploring role of land resource misallocation in China

Within the framework of the new development concept, achieving green technological innovation (GTI) in enterprises through green-oriented and innovation-oriented systems has become a crucial step towards promoting the transformation towards sustainability and innovation-driven development. Furthermore, digital governance has emerged as a powerful catalyst for China's economic and social progress, offering fresh opportunities to enhance the country's level of GTI. Given this, we investigate the influence and mechanism of digital finance on developing environmentally friendly innovations inside A-share listed firms in Shanghai and Shenzhen between 2011 and 2020. The study reveals that digital inclusive finance (DIF), in terms of its reach, level of utilization, and extent of digitization, has a substantial positive impact on GTI. It indirectly stimulates such innovation by exacerbating the imbalance in land resources mismatch. DIF plays a more pronounced role in driving GTI in the eastern and central regions, non-resource cities, second-tier cities, and cities with a higher level of digital economy development and implementation of the broadband China strategy. Digital governance facilitates the efficient implementation of digital finance and fosters a conducive external environment and internal drive for businesses. It offers valuable perspectives on the role of digital finance in China's economic transformation and underscores the significance of digital governance in promoting green technological innovation and economic progress.

The impact of digital inclusive finance on rural income growth in China: evidence from quantile regression approach

ABSTRACT Based on a panel data set from 2013 to 2021 of Chinese provinces and regions, this research aims to reveal the impact of digital inclusive finance on rural disposable income in China. The linear regression approach with Driscoll-Kraay standard errors and the quantile regression approach are applied in this research. Both approaches show that digital inclusive finance significantly impacts China’s rural income growth. The regression results of China’s east, middle and west area separately imply that the impact of digital inclusive finance in on rural disposable income is higher in the east area and middle area than that in the west area. The quantile regression results show that the impact in the higher quantile is larger than in the lower quantile, which indicates rural high-income groups get more benefits from digital inclusive finance than rural low-income groups. Moreover, this research finds that the development of e-commerce contributes significantly to rural disposable income growth. The empirical results of this research indicate that the establishment of digital inclusive finance in the west backward area still need to be improved to increase the access of digital inclusive finance for rural low-income groups.

Recalibrating the scope of financial inclusion through financial technologies in the digital age: the role of digital literacy as a moderator in rural Uganda

PurposeThe main purpose of this study is to test for the interaction effect of digital literacy in the relationship between financial technologies (FinTechs) of biometrics and mobile money and digital financial inclusion among the unbanked poor women, youth and persons with disabilities (PWDs) in rural Uganda.Design/methodology/approachCovariance-based structural equation modeling was used to construct the interaction effect using data collected from the unbanked poor women, youth and PWDs located in the four regions in Uganda as prescribed by Hair et al. (2022).FindingsThe findings from this study are threefold: first; the results revealed a positive interaction effect of digital literacy between FinTechs of biometrics and mobile money and digital financial inclusion. Second; the results also confirmed that biometrics identification positively promotes digital financial inclusion. Lastly; the results showed that mobile money positively promotes digital financial inclusion. A combination of FinTechs of biometrics and mobile money together with digital literacy explain 29% variation in digital financial inclusion among the unbanked poor women, youth and PWDs in rural Uganda.Research limitations/implicationsThe data for this study were collected mainly from the unbanked poor women, youth and PWDs. Further studies may look at data from other sections of the vulnerable population in under developed financial markets. Additionally, the data for this study were collected only from Uganda as a developing country. Thus, more data may be obtained from other developing countries to draw conclusive and generalized empirical evidence. Besides, the current study used cross sectional design to collect the data. Therefore, future studies may adopt longitudinal research design to investigate the impact of FinTechs on digital financial inclusion in the presence of digital literacy across different time range.Practical implicationsThe governments in developing countries like Uganda should support women, youth, PWDs and other equally vulnerable groups, especially in the rural communities to understand and use FinTechs. This can be achieved through digital literacy that can help them to embrace digital financial services and competently navigate and perform digital transactions over digital platforms like mobile money without making errors. Besides, governments in developing countries like Uganda can use this finding to advocate for the design of appropriate digital infrastructures to reach remote areas and ensure “last mile connectivity for digital financial services' users.” The use of off-line solutions can complement the absence or loss of on-line network connectivity for biometrics and mobile money to close the huge digital divide gap in rural areas. This can scale-up access to and use of financial services by the unbanked rural population.Originality/valueThis paper sheds more light on the importance of digital literacy in the ever complex and dynamic global FinTech ecosystem in the presence of rampant cyber risks. To the best of the authors' knowledge, limited studies currently exist that integrate digital literacy as a moderator in the relationship between FinTechs and digital financial inclusion, especially among vulnerable groups in under-developed digital financial markets in developing countries. This is the novelty of the paper with data obtained from the unbanked poor women, youth and PWDs in rural Uganda.

Digital inclusive finance, industrial structure, and economic growth: An empirical analysis of Beijing-Tianjin-Hebei region in China.

As a product of combining digital technology and traditional finance, digital inclusive finance plays a vital role in economic growth. This paper deeply analyzes the impact of digital inclusive finance on economic growth and the specific transmission path. This research selects the municipal panel data of Beijing-Tianjin-Hebei from 2011 to 2020 and empirically studies the impact of digital inclusive finance on economic growth. From the perspectives of industrial structure transformation speed, industrial structure upgrading, and industrial structure rationalization, this study analyzes the role of industrial structure in the impact of digital inclusive finance on economic growth and tests the heterogeneity of the impact of digital inclusive finance on economic growth. The results show that digital inclusive finance has a significant role in promoting economic growth. The depth of use of digital inclusive finance has the most significant impact, followed by the breadth of coverage, and the degree of digitization is the smallest. The industrial structure transformation speed and the industrial structure rationalization play a significant intermediary role in the economic growth effect of digital inclusive finance, and the industrial structure upgrading has no significant impact on the economic growth effect of digital inclusive finance; the promotion effect of digital inclusive finance on economic growth is bigger in the economically developed group, the higher digital inclusive finance group and the technologically developed group, and the promotion effect is smaller in the economically underdeveloped group, the lower digital inclusive finance group and the technologically underdeveloped group. The results provide a strong reference for policy formulation to promote the development of digital inclusive finance and economic growth.

A STUDY OF THE IMPACT OF DIGITAL INCLUSIVE FINANCE ON THE REAL ECONOMY: EVIDENCE FROM CHINA

With the rapid development of digital technology, digital inclusive finance has become an important force for promoting the development of the real economy. Based on an in-depth analysis of the relationship between digital inclusive finance and the development of the real economy, this paper takes Henan Province as an example. Based on the Digital Inclusive Finance Index and the Henan Statistical Yearbook, panel data on 17 prefectural-level cities in Henan Province for the period of 2012-2021 are used to carry out a basic regression analysis of various dimensions by using the fixed effect model, and the promotion effect of digital inclusive finance on the development of the real economy and different dimensions of digital inclusive finance on the promotion of real economic development are drawn. The paper finally used the quantile regression method to carry out a heterogeneity test and concluded that the promotion effect of digital inclusive finance is more significant in regions with lower levels of economic development. Therefore, to better promote the development of the real economy, Henan Province should strengthen the construction of a digital inclusive financial system, emphasize scientific and technological innovation, and use digital inclusive finance to guide rural migrants to return to their hometowns for development.