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How does digital inclusive finance affect county's common prosperity: Theoretical and empirical evidence from China

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  • Guo, Dong
  • Li, Lin
  • Pang, Guoguang

Abstract

As an emerging industry in the convergence of finance and technology, Digital Inclusive Finance (DIF) has gradually become a fundamental driving factor in increasing Common Prosperity (COPRO). However, the potential influence of DIF on COPRO across counties has yet to be clarified. As a result, we explore the impact, heterogeneous characteristics, and pathways of DIF on COPRO using Chinese county-level panel data from 2014 to 2021. The key findings of this paper are as follows: (1) The COPRO in China's counties has shown a steady upward trend, but there are significant differences in regional development levels. (2) DIF can significantly boost the counties' COPRO, and the above conclusion still holds after multiple robustness tests. (3) The coverage and digitalization of DIF contribute more to COPRO than usage. Furthermore, DIF can contribute to COPRO in central and western, highly urbanized, and internet-enabled counties. (4) DIF can encourage COPRO by easing financial constraints and promoting enterprise cultivation. Drawing from the findings above, this paper offers feasible financial solutions and paths for China and developing countries to promote COPRO.

Suggested Citation

  • Guo, Dong & Li, Lin & Pang, Guoguang, 2024. "How does digital inclusive finance affect county's common prosperity: Theoretical and empirical evidence from China," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 340-358.
    • Handle: RePEc:eee:ecanpo:v:82:y:2024:i:c:p:340-358
    DOI: 10.1016/j.eap.2024.03.016
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