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Can China’s Digital Inclusive Finance Alleviate Rural Poverty? An Empirical Analysis from the Perspective of Regional Economic Development and an Income Gap

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  • Mingzhao Xiong

    (Post Graduate Centre, Management and Science University, Shah Alam 40100, Malaysia
    School of Economics and Trade, Henan University of Technology, Zhengzhou 450001, China)

  • Wenqi Li

    (School of Economics and Trade, Henan University of Technology, Zhengzhou 450001, China)

  • Brian Sheng Xian Teo

    (Post Graduate Centre, Management and Science University, Shah Alam 40100, Malaysia)

  • Jaizah Othman

    (Faculty of Business Management and Professional Studies, Management and Science University, Shah Alam 40100, Malaysia
    Department of Economics, College of Business Administration, Princess Nourah bint Abdulrahman University, Riyadh 11671, Saudi Arabia)

Abstract

Digital inclusive finance (DIF) plays an active role in preventing poverty-stricken groups from returning to poverty and reducing poverty. This paper empirically tests the impact of DIF on rural poverty alleviation using panel data from 30 Chinese provinces from 2011 to 2020 as a sample. It employs multiple linear regression, mediation effect models, and threshold effect models. The results show that: (1) DIF and its three sub-indicators (coverage breadth, depth of use, and digitalization degree) have significant poverty reduction effects, and the findings hold even when endogeneity is taken into account; (2) a study of regional heterogeneity found that DIF and its sub-indices, coverage and depth of use in the eastern region, have the greatest effect on the poverty alleviation of rural residents, and the effects in the central and western regions have the least effect; (3) the mediation effect test found that DIF could indirectly promote poverty alleviation in rural areas by promoting regional economic growth and narrowing the urban-rural income gap. The Sobel test shows that the mediating effect of regional economic growth is greater than the mediating effect of the urban-rural income gap; (4) it is found through the threshold effect test that regional economic growth has a double threshold effect on rural poverty alleviation, and as the threshold value continues to increase, the poverty reduction effect increases in turn. Therefore, this paper puts forward policy suggestions for the aspects of accelerating the development of DIF in rural areas, implementing regionally differentiated poverty reduction strategies according to local conditions, promoting regional economic growth, and narrowing the urban-rural income gap.

Suggested Citation

  • Mingzhao Xiong & Wenqi Li & Brian Sheng Xian Teo & Jaizah Othman, 2022. "Can China’s Digital Inclusive Finance Alleviate Rural Poverty? An Empirical Analysis from the Perspective of Regional Economic Development and an Income Gap," Sustainability, MDPI, vol. 14(24), pages 1-18, December.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:24:p:16984-:d:1007252
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    References listed on IDEAS

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    7. Shiqin Yang & Zisheng Yang & Renyi Yang & Xueli Cai, 2023. "Analysis of the Spatio-Temporal Evolution, Influencing Factors, and Spillover Effects of the Urban–Rural Income Gap in Chongqing Municipality, China," Agriculture, MDPI, vol. 13(4), pages 1-23, April.
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