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Financial Inclusion and Urban–Rural Income Inequality: Long-Run and Short-Run Relationships

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  • Youxing Huang
  • Yan Zhang

Abstract

Using Chinese provincial data over the period 1985–2013 and conducting the panel cointegration methods, we find that financial inclusion narrows the urban–rural income inequality in the long run, but expands it in the short run. These results can also be observed when sub-dimensional indexes of financial inclusion are tested, including financial accessibility and availability. Moreover, we find that the speed of financial networks’ expansion and the education disparity between rural and urban areas are two possible reasons to explain the short-run increase.

Suggested Citation

  • Youxing Huang & Yan Zhang, 2020. "Financial Inclusion and Urban–Rural Income Inequality: Long-Run and Short-Run Relationships," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 56(2), pages 457-471, January.
  • Handle: RePEc:mes:emfitr:v:56:y:2020:i:2:p:457-471
    DOI: 10.1080/1540496X.2018.1562896
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    Cited by:

    1. Sabyasachi Tripathi & Meenakshi Rajeev, 2023. "Gender-Inclusive Development through Fintech: Studying Gender-Based Digital Financial Inclusion in a Cross-Country Setting," Sustainability, MDPI, vol. 15(13), pages 1-34, June.
    2. João Jungo & Mara Madaleno & Anabela Botelho, 2022. "Financial Regulation, Financial Inclusion and Competitiveness in the Banking Sector in SADC and SAARC Countries: The Moderating Role of Financial Stability," IJFS, MDPI, vol. 10(1), pages 1-24, March.
    3. Chinonyerem Matilda Omenihu & Sanjukta Brahma & Epameinondas Katsikas & Demetris Vrontis & Evangelia Siachou & Ioannis Krasonikolakis, 2024. "Financial Inclusion and Poverty Alleviation: A Critical Analysis in Nigeria," Sustainability, MDPI, vol. 16(19), pages 1-21, September.
    4. Singh, Bhanu Pratap & Kumari, Annu & Sharma, Tanya & Malhotra, Abhishek, 2020. "Does PMJDY Scheme Augmented Financial Inclusion in India? Evidence from Indian States," MPRA Paper 104442, University Library of Munich, Germany.
    5. Susanta Kumar SETHY & Phanindra GOYARI, 2022. "Measuring financial inclusion and its present status in South Asian countries. Evidence from a multidimensional Financial Inclusion Index," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(3(632), A), pages 131-150, Autumn.
    6. Xuanming Ji & Kun Wang & He Xu & Muchen Li, 2021. "Has Digital Financial Inclusion Narrowed the Urban-Rural Income Gap: The Role of Entrepreneurship in China," Sustainability, MDPI, vol. 13(15), pages 1-18, July.
    7. Yao Zhang & Jianjun Huai, 2023. "A Case Study of Farmers’ Behavioral Motivation Mechanisms to Crack the Fractal Multidimensional Relative Poverty Trap in Shaanxi, China," Agriculture, MDPI, vol. 13(11), pages 1-22, October.
    8. Tang, Le & Sun, Shiyu, 2022. "Fiscal incentives, financial support for agriculture, and urban-rural inequality," International Review of Financial Analysis, Elsevier, vol. 80(C).
    9. Singh, Bhanu Pratap & Kumari, Annu & Sharma, Tanya & Malhotra, Abhishek, 2020. "Does PMJDY Scheme Augment Financial Inclusion in India? Evidence from Indian States," MPRA Paper 104733, University Library of Munich, Germany.
    10. Li, Xitong & He, Peiming & Liao, Honglin & Liu, Jindan & Chen, Litai, 2024. "Does network infrastructure construction reduce urban–rural income inequality? Based on the “Broadband China” policy," Technological Forecasting and Social Change, Elsevier, vol. 205(C).
    11. João Jungo & Mara Madaleno & Anabela Botelho, 2022. "The Effect of Financial Inclusion and Competitiveness on Financial Stability: Why Financial Regulation Matters in Developing Countries?," JRFM, MDPI, vol. 15(3), pages 1-20, March.

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