Digital Financial Inclusion Research Articles

Peer effects in digital inclusive finance participation decisions: Evidence from rural China

Digital inclusive finance (DIF) has emerged as a powerful tool for promoting economic development and eliminating regional imbalances. Many studies have discussed different approaches to expand the coverage rate and increase the participation rate of DIF in developing countries. This study employs a binary choice model with rational heterogeneous expectations utilizing data from CHFS to examine the impact of peer effects on DIF participation choices in rural China. The findings indicate that peers' participation choices in DIF have a positive impact on the individual's participation choices in DIF, primarily through an information transmission mechanism. Moreover, the regional economy effects are explicitly demonstrated since the progress of DIF in more advanced communities may produce a unidirectional spillover effect on less advanced communities. Based on these results, policy implications are recommended to enhance financial education and construct financial wellness programs.

Digital financial inclusion, educational attainment and household consumption

This paper selects the survey data of CHFS in 2017, 2019, and 2021 as a sample to explore the relationship between digital financial inclusion, educational attainment, and household consumption and finds that the development of digital financial inclusion promotes residents' consumption; the educational attainment of residents is positively correlated with household consumption; the leverage of household residents plays a mediating role in the relationship between digital financial inclusion and household consumption; and there is a difference in the impact of digital financial inclusion on household consumption differs between urban and rural residents.

The relationship between the digital finance, tax and economic growth: in the context of financial development

ABSTRACT This article examines the relationship between economic development, taxes, and digital finance within financial development from 2004 to 2021 using the Panel Vector Autoregression (PVAR) model. The study finds that tax revenue, economic growth, and digital financial inclusion are linked in both low- and high-financial development countries. In less developed financial nations, digital financial inclusion increases tax income but decreases economic growth. Variance decomposition shows a closer association between economic growth, tax revenue, and digital financial inclusion in low-financial development countries. The author offers policy recommendations based on these findings.

The Impact of Digital Financial Inclusion on Residents’ Entrepreneurial Decisions

The Impact of Digital Financial Inclusion on Residents’ Entrepreneurial Decisions

The impact of digital financial inclusion on bank performance: An exploration of mechanisms of action and heterogeneity.

The use of digital technology by banks and other financial institutions to facilitate financial inclusion is referred to as digital financial inclusion. This fusion of digital finance and traditional banking methods has the potential to impact banks' operational effectiveness. This study uses the panel effects model to examine the link between digital financial inclusion and bank performance in 30 Chinese provinces from 2012 to 2021. This research uses kernel density estimation to examine the spatial-temporal growth patterns of both variables. The mediator variable in examining how digital financial inclusion affects bank performance is risk-taking. Finally, the paper analyses the regional heterogeneity of the impact. It presents the following conclusions: (1) In China, digital financial inclusion and bank performance have constantly increased, with noticeable regional variances in their development levels. This regional inequality has widened gradually since 2018, yet it has not resulted in polarization. (2) The significant positive correlation between digital inclusive finance and banking performance indicates that banking performance tends to increase with the enhancement of digital inclusive finance. (3) Digital financial inclusion impacts bank performance, with risk-taking as a moderator. The spread of digital financial inclusion services enhances banks' willingness to take risks, enhancing overall efficiency. (4) Digital financial inclusion boosts bank performance in the Northwest, South, North, and East regions while lightly inhibiting it in the Central region. Based on the findings, this study makes bank and government suggestions.

Natural resources, digital financial inclusion, and good governance nexus with sustainable development: Fuzzy optimization to econometric modeling

AbstractThis study aims to investigate the complex interplay between natural resources, digital financial inclusion, good governance, and sustainable development outcomes, employing a hybrid methodological approach which combines fuzzy‐set qualitative comparative analysis (fsQCA), necessary condition analysis (NCA), and econometric modeling. Drawing on data from 18 countries spanning 2013–2019, the study unravels the impact of these factors on sustainable development (SD) and explores the moderating role of governance. The findings reveal positive effects of digital financial inclusion, natural resources, and good governance on SD, with governance quality enhancing the relationship between digital financial inclusion and development outcomes. However, governance does not significantly moderate the link between natural resources and sustainability, which illustrates the need for tailored governance approaches in resource‐dependent contexts. Theoretical implications highlight the relevance of institutional theory in understanding the dynamic nature of development processes, while practical implications offer actionable insights to foster holistic and resilient pathways to sustainable development. Thus, the study contributes to advancing our understanding of the intricate relationships shaping SD outcomes and informs evidence‐based policy interventions in this critical domain.

Digital and traditional financial inclusion: Trends and drivers

This study examines the drivers of traditional and digital financial inclusion, emphasizing the catalytic role of digital inclusion in propelling traditional financial inclusion. Utilizing global data from 2004 to 2020, we construct two multidimensional financial inclusion indices: digital and traditional, and observe time trends. We then explore country-level determinants of traditional and digital financial inclusion with a special focus on banking system conditions. Finally, we investigate the role of digital financial inclusion in driving the traditional financial inclusion. Results show a significant improvement in financial inclusion over the period studied. The top countries for digital financial inclusion are primarily African developing nations, while high-income European countries lead in traditional inclusion. In terms of determinants, our main findings reveal that banking system conditions, mobile penetration, and urbanization significantly impact the level of digital and traditional financial inclusion. Moreover, we demonstrate that digital financial inclusion paves the way towards traditional financial inclusion in the medium term.

Analysis of the effect of digital financial inclusion on agricultural carbon emissions in China

<p style="text-align:justify"><font _mstmutation="1">In the context of China's "dual carbon" goal, digital financial inclusion plays an important role in agricultural carbon reduction. Based on the provincial panel data of 31 provinces in China from 2012 to 2022, this paper analyzes the impact of digital financial inclusion on agricultural carbon emissions and its transmission mechanism. The results show that digital financial inclusion has a significant inhibitory effect on agricultural carbon emissions. From the perspective of mechanism, inclusive digital finance can reduce agricultural carbon emissions through the upgrading of agricultural industrial structure. In addition, in the mechanism of digital inclusive finance affecting agricultural carbon emissions, there is a threshold effect, and only when rural human capital is higher than a certain threshold, digital inclusive finance can show an inhibitory effect on agricultural carbon emissions. Therefore, it is necessary to strengthen the multi-dimensional development of digital technology facilities, the development of digital inclusive finance and the upgrading of agricultural industrial structure, promote the green and low-carbon transformation of agriculture, comprehensively reduce agricultural carbon emissions, and realize the low-carbon and sustainable development of China's agriculture.</font></p>

The impact of digital inclusive finance on regional capital aggregation

The impact of digital inclusive finance on regional capital aggregation

Research on the Current Situation and Problems of the Use of Digital Inclusive Finance

This study aims to investigate the use of digital inclusive finance among college students in Guangzhou and its influencing factors. Through the questionnaire survey and data analysis, the popularity, willingness to use, and barriers to the use of digital inclusive finance among college students are found, and the reasons behind them are analysed and discussed, which provide references and suggestions for promoting the application of digital inclusive finance among the college student population.

Digital inclusive finance and regional economic resilience: Evidence from China's 283 Cities over 2011-2021

This paper uses the data from 283 prefecture-level cities in China from 2011 to 2021 to study the impact of digital inclusive finance on the resilience of the regional economy. The research results indicate that developing digital inclusive finance can significantly enhance regional economic resilience. The mechanism test results suggest that developing digital inclusive finance has improved regional economic resilience mainly by promoting regional innovation capacity and improving regional resource allocation efficiency. In addition, digital inclusive finance can significantly promote economic resilience in regions with higher economic and finance development levels. However, in regions with lower economic and financial development levels, it can significantly decrease regional economic resilience.

Byte-Sized Finance, Bushel-Sized Benefits: unraveling digital financial inclusion impact on China’s agricultural green development

Byte-Sized Finance, Bushel-Sized Benefits: unraveling digital financial inclusion impact on China’s agricultural green development

Environmental technology and firm performance: The role of digital financial inclusion, information and communication technology, and education

Environmental technology and firm performance: The role of digital financial inclusion, information and communication technology, and education

Digital financial inclusion, analyst attention, and the green innovation in energy firms

The transition towards environmental sustainability in China's energy sector underscores the crucial role of digital financial inclusion and analyst attention. This study employs an empirical analysis of data from listed Chinese energy-sector firms spanning 2011 to 2022, integrating regression models to investigate the impact of digital financial inclusion on green innovation and the moderating role of analyst attention. Findings reveal that digital financial inclusion significantly facilitates green innovation in energy firms, and analyst attention further amplifies this effect. Heterogeneity analysis shows regional differences, with the eastern and central regions benefiting more from digital financial inclusion, while the western region shows no significant effect. Additionally, state-owned enterprises experience a stronger positive impact compared to non-state-owned enterprises. The study highlights the synergistic potential between digital financial mechanisms and market dynamics in driving sustainable practices. Implications extend to policymakers, financial institutions, and energy companies, suggesting that enhancing digital financial access and market visibility of green initiatives can collectively advance sustainability goals within the energy sector, contributing to broader environmental and economic objectives.

Indigenous knowledge and digital financial inclusion: a comparison between Europe and Sub-Saharan Africa

ABSTRACT M-Pesa is one leading example of mobile money services. It reveals the importance of digital financial inclusion (DFI) in countries still largely unbanked, and of institutional factors in shaping DFI. Yet, extant research has not investigated the combined effect of these factors, informal (indigenous knowledge) and formal (regulatory) institutions, on DFI. This study intends to do so leveraging the institutional theory and applying regression techniques to data from 1000 digital-finance users. It reveals different effects of institutional factors across regions. In Europe, strong formal institutions shape DFI. In Sub-Saharan Africa (SSA), weak institutions combined with high indigenous knowledge increase DFI. These findings are crucial for countries’ development, as financial inclusion is considered a key enabler of several SDGs (Sustainable Development Goals). They could help adapt financial-inclusion programs by including the indigenous-knowledge component in countries facing weak formal institutions, to maximize their chances of success in fostering development and growth.

A Study on Accelerating Digital Financial Inclusion for positioning India through AI-enabled Banking Services

This research paper examines the role of AI-enabled banking services in accelerating digital financial inclusion in India, with a focus on positioning the country for the future. Financial inclusion, granting access to financial products and services, is crucial for India's economic growth and development. Despite progress, challenges like the digital divide and limitations of traditional banking models hinder inclusion, particularly in rural areas. The study proposes that AI-enabled banking services can be a game changer. AI can personalize financial products, improve creditworthiness assessments for under-served populations, and enhance security. By leveraging AI, India can empower its citizens, promote financial literacy, and solidify its position as a global financial leader. The study also explores the potential benefits and challenges associated with implementing AI in the Indian banking sector, considering factors such as regulatory frameworks, infrastructure requirements, and user adoption. The research explores how AI can address existing hurdles and proposes strategies for leveraging AI responsibly and ethically for inclusive financial growth. The paper aims to contribute to the ongoing dialogue on utilizing AI to empower all Indians and achieve sustainable economic development. This study used review of literature and survey as primary data to assess the impact of AI on digital financial inclusion. The present study discovered that AI has a strong influence on digital financial inclusion in areas related to behavioral finance, customer satisfaction and service efficiency.

Entrepreneurial Choice and Economic Returns of Women: Digital Financial Inclusion as a Moderator

Entrepreneurial Choice and Economic Returns of Women: Digital Financial Inclusion as a Moderator

The nexus among digital financial inclusion, monetary policy transmission, and economic development in Sub-Saharan Africa

This paper aims to examine the complex relationship between digital financial inclusion, monetary policy transmission, and economic development in 18 Sub-Saharan African countries from 2004 to 2021. The study utilizes panel data and employs a digital financial inclusion index, broad money growth, and real gross domestic product per capita as proxies for digital financial inclusion, monetary policy transmission, and economic development, respectively. The panel autoregressive distributed lag model results uncover a bi-directional causality between economic development and digital financial inclusion, emphasizing the pivotal role of digital financial inclusion in fostering economic development. Additionally, another bi-directional causality between digital financial inclusion and monetary policy transmission highlights their interdependence. Unidirectional causality from monetary policy transmission to economic development is also established. This study emphasizes the crucial role of robust measures in enhancing digital financial inclusion to avert adverse consequences, offers nuanced insights into policy dynamics, particularly regarding inflation mitigation, and enhances monetary policy effectiveness. These findings underscore the importance of policy reform, legislation, and regulatory improvements to promote digital financial inclusion by Sub-Saharan African central banks. Strengthening rural financial infrastructure is crucial for driving digital financial inclusion, sustainable economic development, and reducing regional inequalities.

Digital financial inclusion and household financial vulnerability: An empirical analysis of rural and urban disparities in China

In recent times, a notable increase in the leverage ratios among numerous households across China has been witnessed, culminating in heightened household financial vulnerability. Concurrently, the sphere of digital inclusive finance has witnessed rapid advancement, establishing itself as a crucial mechanism for Chinese households to counteract financial risk shocks. This research article meticulously constructs an ordered regression model, anchored in micro-level data from household surveys, to delve into the influence and operative mechanisms of digital inclusive finance on the vulnerability of household finances. Empirical findings from this study robustly indicate that the evolution of digital inclusive finance significantly mitigates the household financial vulnerability. A thorough mechanism analysis reveals that digital inclusive finance primarily curtails household financial vulnerability through several avenues: it notably enhances financial literacy, augments the income derived from household financial assets, and elevates contributions to commercial insurance. Intriguingly, a heterogeneity analysis underscores that the impact of digital inclusive finance is more pronounced in reducing financial vulnerability amongst households registered in rural areas and those with lower income levels. This article contributes to the expansion of the theoretical framework concerning household financial vulnerability, offering insightful guidance and policy implications for addressing financial vulnerability concerns and forestalling macro-financial risks.

Mechanism Analysis and Response of Digital Financial Inclusion to Labor Economy based on ANN and Contribution Analysis

Abstract Given the inclusiveness of digital inclusive finance (DFI) and its complex impact mechanism on the labor economy, this study uses the characteristics of adaptive and self-learning ability of artificial neural network (ANN) to simulate the process of delivering stimuli to nerve cells in the human brain through linear weighted summarization and functional mapping, and implement the optimization learning algorithm to adjust the weights in the network structure, thus completing the hierarchical analysis of index weight. At the same time, the neural network structure is used to approach the greatest extent and Garson algorithm is used for sensitivity analysis. We use data on the labor economy and digital financial inclusion in Heilongjiang, Jilin, and Liaoning provinces in China from 2011 to 2021 as a training dataset. The study found that (1) the indexes of DFI have different importance to the indexes of labor economy, among which the most important are the number and amount of insurance per capita and the proportion of the number and amount paid by digital technology, which have a normalized importance of 100 and 99.3%, further, R-square coverage is above 0.95, respectively, for labor economy indicators; (2) For different subdivided indicators, the indexes of DFI determine different significance. This study employs tools and policies related to DFI to address labor economy challenges, so as to promote the overall economic construction. This study studies the response and transmission mechanism of the concept of DFI to the labor economy, and explores the labor economy problems such as improving labor productivity and labor mismatch in the economy under its “inclusive” principle. Compared with the traditional weight analysis, it is closer to the real situation and has a stronger ability to fit the reality. In the future, the model could be rebased and measured against absolute indicators and a wider dataset could be adopted for extension to more areas.