Digital Financial Inclusion Research Articles

Financial inclusion through digitalization and economic growth in Asia-Pacific countries

Digital technology for financial inclusion tends to bring more benefits to people at the bottom of the economic pyramid across the Asia-Pacific region; therefore, financial inclusion is crucial for sustainable development and economic growth in this region. Digital financial services, based on technology-driven innovation, contribute to enhanced financial inclusion at affordable prices, which potentially reaches many new people who are unbanked or underbanked. This paper examines the impact of digital financial inclusion (DFI) on economic growth in 30 Asia-Pacific countries based on panel data for 2014, 2017, and 2021. A three-stage principal component analysis is used to develop the DFI index for the Asia-Pacific region, capturing both the digital and traditional aspects. We use fixed effect regression to examine the linear effect of DFI on economic growth, and results show a significant positive impact, contributing to the Theory of Finance and Growth, System Theory, and Diffusion Theory of Innovation. Given the different roles of DFI in different countries and the wide digital divide across the region, this paper employs a panel threshold regression model to identify any non-monotonic influence of DFI on economic growth. The results show a significant threshold effect of DFI, indicating the non-linear effect of financial inclusion on economic growth. The paper brings evidence-based policy implications to boost DFI to achieve inclusive growth.

Digital Inclusive Finance Supports the Modernization of Agriculture Development

In the process of financial development, the high threshold and credit asymmetry not only increase the difficulty and cost of financing in rural agriculture, but also hinder the upgrading of agricultural industrial structure and delay the development of agricultural modernization. With the development of information technology and the wide application of big data, digital inclusive finance has become an important path and inevitable choice to promote the upgrading and modernization of China's agricultural industrial structure. The project intends to use the entropy method to measure the development level of agricultural modernization; Based on the two-way fixed effect model, the paper explores the effect of digital inclusive finance on agricultural modernization. With the help of the intermediary effect model, this paper explores the internal mechanism of the influence of the digital inclusive financial policy on the development of rural modernization from the level of "the upgrading of agricultural industrial structure". Based on the empirical results, this paper analyzes the heterogeneity of the effects of digital financial inclusion policies from the two dimensions of rural location and rural characteristics, and explores an effective path to promote digital financial inclusion and industrial upgrading in rural areas with prominent internal differences, with a view to providing reference and basis for the formulation and implementation of future digital financial inclusion and agricultural modernization development policies.

Impact of digital financial inclusion on economic growth: a study on Bangladesh

PurposeThe purpose of the study is to find out the impact of Digital Financial Inclusion (DFI) on economic growth [(Industrial Production Index (INDP)] of Bangladesh.Design/methodology/approachUsing the monthly data over the period 2018 M12 to 2021 M12, this study applied the Auto-regressive Distributed Lag (ARDL) model to assess the effect of DFI indicators on INDP. The secondary data was collected from the Bangladesh Bank and CEIC Global Economic Data.FindingsThe study found that the majority of DFI indicators are positively associated with INDP. From the short-run ARDL, it is seen that one unit positive increase in Point of Sales Transactions (POST) can increase the INDP by 0.055 units. From the long-run ARDL, it is seen that POST and e-commerce transactions (ECOMT) have a significant positive impact, while Automated Teller Machine Transactions (ATMT) have a significant negative effect on INDP. One unit increase in POST and ECOMT increases INDP by 0.13544 and 0.11611 units, respectively.Research limitations/implicationsDuring the era of the fourth industrial revolution, the findings will be beneficial for policymakers, financial technology service providers, manufacturers, consumers, corporations and investors as they pave the way for a more inclusive approach to financial transactions for economic growth.Originality/valueThe study’s novelty is that it explored the influential DFI indicators and shed light on both short-run and long-run relationships between the indicators and macro-economy from the context of a developing nation.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-04-2023-0306

Dynamic Impact of Digital Inclusive Finance and Financial Market Development on Forests and Timber in China: Economic and Social Perspective

This study investigates how digital inclusive finance, financial development, and technology influenced forest and timber outputs across 31 provinces in China from 2011 to 2021. The findings, derived from panel quantile regression analysis, indicate that digital inclusive finance significantly enhances forest economic output, particularly in regions with lower economic activity, by improving access to critical financial resources such as credit and investment. However, the positive effects diminish at higher levels of economic activity, suggesting potential diminishing returns. Through the marketization of credit distribution and diverse financial instruments, financial development is essential for promoting sustainable forestry practices and adopting new technologies. Based on the findings, the study suggests expanding digital financial services in areas with low forest activity to help people access credit and investments, boosting forest productivity. It also recommends improving financial markets and investing in new forestry technologies to support better forest management and timber production.

The Impact of Digital Inclusive Finance on Agricultural Carbon Emissions: Evidence from China

The Impact of Digital Inclusive Finance on Agricultural Carbon Emissions: Evidence from China

Adoption Dynamics of Digital Payments: An Urban Case Study on E-Money Using the Technology Acceptance Model

The utilization of e-money in Indonesia has surged, propelled by the expansion of digital payment platforms. Despite their growing prevalence, the dynamics of e-money acceptance within urban environments remain underexplored. This study innovatively extends the Technology Acceptance Model (TAM) by incorporating Perceived Security as a new variable, alongside traditional factors such as Perceived Usefulness, Perceived Ease of Use, Attitude Toward Using, Behavioral Intention to Use, and Facilitating Condition. The research focuses on Padang City, a representative urban landscape, where data was collected from 201 valid respondents through online platforms. Data analysis was conducted using Partial Least Squares Structural Equation Modeling (PLS-SEM). The integration of Perceived Security is a novel aspect of this study, reflecting its crucial role in the contemporary urban context of e-money utilization. Results reveal significant relationships among the studied variables, although the impacts of Facilitating Condition on Perceived Ease of Use and Perceived Usefulness on Behavioral Intention to Use were not supported. The findings underscore that positive attitude toward e-money significantly boost behavioral intentions to use it, primarily influenced by security perceptions and ease of use. These insights have substantial implications for policymakers and businesses focused on enhancing e-money adoption in urban settings. The study highlights the necessity of addressing user perceptions, particularly security, to foster broader acceptance. The limited influence of Facilitating Conditions suggests that improvements in infrastructure must be coupled with efforts to enhance user trust and ease of interaction with e-money platforms. This research contributes to the field by providing a deeper understanding of the factors driving e-money acceptance in urban areas, guiding targeted strategies for digital financial inclusion.

Empirical Study on the Development of Digital Inclusive Finance on Narrowing the Consumption Gap between Urban and Rural Areas--Taking Shanxi Province as an Example

Based on the panel data of 11 cities and regions in Shanxi Province from 2011 to 2020, the study empirically investigates the impact of digital financial inclusion on the urban-rural consumption gap in Shanxi Province from the perspective of the overall effect and regional effect of digital financial inclusion development. The study finds that, in general, digital inclusive finance has narrowed the consumption gap between urban and rural residents through the high-quality features of low threshold and accessibility, from the perspective of regional heterogeneity, the uneven development of digital inclusive finance has led to significant differences in its effect on the consumption gap between urban and rural residents among regions, showing the characteristics of a ladder with a high level in the south and a low level in the north, and from the perspective of structural heterogeneity, the structure of digital inclusive finance development also has a significant impact on the consumption gap between urban and rural residents in Shanxi Province. From the perspective of structural heterogeneity, the impact of the development structure of digital inclusive finance on the consumption gap between urban and rural residents in Shanxi Province also varies, with the breadth of coverage bringing better bridging effects than the depth of use, while the degree of digitization creates the problem of digital divide and widens the consumption gap, finally, relevant suggestions are put forward with a view to narrowing the consumption gap between urban and rural areas and promoting the coordinated development of urban and rural areas.

Does digital inclusive finance promote agricultural development?A test based on threshold and spillover effects

This paper investigates the connection between the advancement of high-quality agricultural development and digital inclusive finance using data from China's province panels covering the years 2011 to 2021. The results reveal several key insight:1)Digital inclusive finance can significantly contribute to high-quality agricultural development; 2)The impact is characterized by non-linearity, and it displays threshold traits associated with the entrepreneurship of rural residents; 3)Spatial spillover effects suggest that digital inclusive finance not only contributes to the region's increasing level of high-quality agricultural development, but it also supports the high-quality agricultural development processes of surrounding regions.

Dynamics of Digital Financial Inclusion in Türkiye

Dynamics of Digital Financial Inclusion in Türkiye

The Impact of Digital Inclusive Finance on the Sustainable Growth of Income of Herdsmen in China’s Pastoral Areas

The sustainable growth of income for farming households in pastoral areas represents a crucial challenge not only for China but also for other developing nations in the process of transition to ecologically friendly models. The scarcity of assets available for collateral, along with vulnerable production conditions and developmental shortcomings, pose significant barriers to the consistent expansion of herdsmen’s income. This paper analyzes the impact of digital financial inclusion on the income of herdsmen in ethnic minority regions using panel data models from nine major pastoral provinces in China from 2011 to 2022. Through a fixed-effects model approach, the analysis delves into the influence of digital financial inclusion and subjects it to multi-dimensional and robustness tests to ensure the reliability of the findings. Furthermore, the research explores the underlying mechanisms through which digital financial inclusion contributes to income enhancement for herdsmen in these areas, employing mediation effect techniques to provide deeper insights into the relationship between digital financial services and economic upliftment in remote ethnic communities. The research findings indicate that digital financial inclusion has a positive impact on the income of herdsmen in ethnic minority regions. The breadth of coverage, depth of usage, and level of digitalization of digital financial inclusion all play a significant role in enhancing the income levels of herdsmen. In terms of the degree of influence, the impact of digital finance on the income of ethnic minorities follows this order: depth of usage > degree of digitalization > breadth of coverage. Notably, through financial backing that catalyzes a shift in herdsmen’s production methodologies and propels industrial upgrading, there is a profound potential to increase herdsmen’s output efficiency. This, in turn, alleviates the ecological strain on China’s environmentally delicate zones. Moreover, financial backing can condense the breeding periods for herdsmen, thereby ameliorating the ecological degradation associated with excessive grazing in pastoral regions. A mediating-effect analysis reveals that digital financial inclusion can boost economic development in ethnic minority regions by increasing wage income, raising per capita GDP levels, and promoting industrial structure upgrading. This, in turn, leads to an improvement in the income of herdsmen in these regions. This is particularly pertinent in China, where the eco-fragility of pastoral regions coincides with the modest income of herdsmen, underscoring the critical importance of herdsmen’s finance. To foster sustainable progress in these regions, financial backing is imperative to elevate herdsmen’s income and to induce a transformative shift in production approaches and industrial layout, paving the way for the sustainable development of these pastoral regions.

The dynamic role of digital financial inclusion, sustainable energy transition, and governance in achieving global ecological sustainability

AbstractA global surge in socio‐economic activities is putting a massive burden on ecological balance, which has become one of the major challenges worldwide. Yet, it is complicated for national and international authorities to find eco‐friendly and interlinked socio‐economic developments due to a lack of empirical evidence. In this era of digitalization, digital financial inclusion has an ability to create a balance among economy, ecology, and society by conserving natural resources. Meanwhile, it minimizes ecological burden by promoting sustainable energy transition at all societal levels, which is the main agenda of the United Nations (UN) Climate Change 28th Conference of Parties (UN‐COP28). Focusing on these intentions, this research aims to explore the dynamic influence of digital financial inclusion (DFI), sustainable energy transition (SET), and governance (GOV) on global ecological footprints (EFT) by taking a sample of 121 nations within a timeframe of 2003–2022. This study utilizes a two‐step system generalized method of moments (GMM) and Driscoll–Kraay (D–K) regression as prime and robust empirical techniques, respectively. The outcomes reveal that DFI significantly reduces EFT worldwide and upper‐middle‐income samples; however, it significantly enhances EFT in high‐income nations. While DFI has a negative and insignificant connection with EFT in lower‐middle and low‐income countries. Moreover, SET significantly declines EFT in all categories, and mixed outcomes are found for the linkage between GOV and EFT. Some vital policy implications for ecological sustainability are also provided in this research work.

Environmental Decentralization, Digital Financial Inclusion, and the Green Transformation of Industries in Resource-Based Cities in China

In the digital era, digital financial inclusion plays a pivotal role in facilitating green industrial transformation and green development in resource-based cities. In this study, we conduct an in-depth analysis of environmental decentralization and digital financial inclusion and their mechanism of influence on the industrial green transformation of resource-based cities, utilizing panel data from resource-based cities in China between 2011 and 2022, in order to perform empirical tests using fixed effects and threshold models. The results indicate that environmental decentralization can advance the green transformation of industries, and that, under the influence of digital financial inclusion, environmental decentralization has a significant reverse impact on the green transformation of industries of resource-based cities in China. Furthermore, different levels of digital financial inclusion contribute to varying effects of environmental decentralization on the green transformation of industries. Additionally, the impact of environmental decentralization on the green transformation of industries differs among various types of resource-based cities in China. Therefore, we should continuously optimize the management system of environmental decentralization, improve the digital financial inclusion service system, fully leverage the advantages of digital financial inclusion, accurately grasp and scientifically utilize the driving principles of environmental decentralization, and implement measures in different cities according to the situation, in order to advance the green transformation of industries in resource-based cities in China.

Research on the Impact of Digital Inclusive Finance on Rural Economic Development

Digital technology significantly enhances the efficiency, user experience, coverage, and accessibility of financial services. It effectively addresses the issue of imbalanced and inadequate financial services, provides strong support for the advancement of inclusive finance, and facilitates high-quality development of the real economy. Currently, rural rejuvenation and digital inclusive finance are two prominent topics in China. The objective of this article is to identify and address issues by examining the correlation between digital inclusive finance credit and the rural economy. This paper employs a fixed effects model to examine the correlation between digital inclusive financial credit business and the additional value generated by the primary industry. The results indicate a strong negative association between the digital inclusive financial lending business and the added value of the primary industry. The government should prioritize the simultaneous progress of digitalization and finance in rural areas in order to establish a more comprehensive rural economic and financial system.

Can digital financial inclusion facilitate intergenerational income mobility? Evidence from China

We present an empirical study on the impact of digital finance development on intergenerational income mobility. Combining nationally representative Chinese household survey data with indices for digital financial inclusion (DFI), we find that the development of digital finance leads to a lower correlation between children's income and their fathers’ income, significantly enhancing intergenerational mobility. Specifically, a one standard deviation increase in the DFI index is associated with a decrease in intergenerational income elasticity by 0.04–0.05. The effect is particularly pronounced in rural and inland regions. Furthermore, we find that digital finance development stimulates household entrepreneurial activities, which in turn enhance the role of digital finance in reducing intergenerational income correlation.

Gendered distributional impacts of ownership of mobile money account on farm input expenditures: A micro perspective from rural maize farmers in Ghana

AbstractThis article investigates the distributional impact of mobile money account ownership on farm input expenditures among maize farmers in southern Ghana. Using cross‐sectional data from 1044 farm households, we employed an instrumental variable quantile regression to account for endogeneity and selection bias. We find that socioeconomic, spatial location, and institutional factors significantly influence male and female‐headed household decisions to own mobile money accounts. The empirics show that male‐headed households spend more on fertilizer and pesticide relative to female‐headed households. Mobile money account ownership increases fertilizer expenditure in male‐headed households more than female‐headed households. Male‐headed families with mobile money accounts spend 13.9% and 6.5% more on fertilizer at the 40th and 60th quantiles. High 80th quantile female‐headed households spend 4.3% more on fertilizer. For male‐headed households, farming experience and education positively influence mobile money account ownership on fertilizer expenditure, while off‐farm activity at the 40th quantile positively influences female‐headed households. Our results distill useful policy implications that call for concerted efforts targeted at digital financial inclusion with an eye to bridging differential gender gaps.

The dual effects of digital inclusive finance on the urban-rural income gap: An empirical investigation in China's Yangtze River Delta region

The digital development of finance has positive implications for improving income inequality. As one of the mainstream research findings, the view that digital inclusive finance could alleviate the urban-rural income gap has been reaffirmed. Further empirical evidence reveals that digital inclusive finance bridges the urban-rural income gap by enhancing deposit behavior and promoting innovation activities. Compared with large population scale cities, the development of digital inclusive finance in small ones has a more significant reduction effect on the urban-rural income gap.

Can Digital Financial Inclusion Narrow the Urban-rural Income Disparity in Central Region of China?

Can Digital Financial Inclusion Narrow the Urban-rural Income Disparity in Central Region of China?

Bridging the green gap: How digital financial inclusion affects corporate ESG greenwashing

We examine whether and how the development of digital financial inclusion (DFI) affects firm environmental, social, and governance (ESG) greenwashing. Our findings indicate that local DFI prohibits firms' greenwashing behaviors. These conclusions are supported through robust analysis using a multidimensional fixed-effects model, alternative measures, and an instrumental variable approach. Our research provides compelling evidence that DFI dampens corporate greenwashing by easing financial constraints and reducing information asymmetry. Additionally, DFI promotes genuine corporate engagement in ESG activities, though it does not influence ESG disclosure practices. Notably, the effects are more pronounced in firms with limited analyst coverage and increased government supervision.

Modeling Digital Inclusive Finance and Corporate Green Technology Innovation Towards the Formation of Green Finance and Green Economy Through Green Monetary and Fiscal Policies in 5 Advanced Asian Countries

Facing global problems such as environmental degradation and climate change. Literature analysis shows that the green economy focuses on transformation towards low-carbon development, resource efficiency and population welfare through technology and innovation. Over the past few decades, research on green finance has increased, with many publications demonstrating the importance of green finance in supporting renewable energy projects and climate-resilient urban infrastructure. Despite progress, challenges such as the global economic contraction due to COVID-19 and increasing poverty show the need for a more integrated and sustainable approach in implementing green finance and the green economy

A study on Socio-Demographic perspective of Digital Financial Inclusion in Rural Odisha

A study on Socio-Demographic perspective of Digital Financial Inclusion in Rural Odisha