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Mitigating Financial Investment Polarization: The Role of Digital Payments in Enhancing Household Participation

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  • Shao-Chieh Hsueh
  • Shuoxun Zhang
  • Liming Hou

Abstract

This study examines the impact of digital payments on household financial asset investment, using the China Household Finance Survey (2013–2019). Our findings indicate that digital payments positively affect financial market participation and investment size, reshaping asset allocation structures. While households using digital payments show increased participation and investment amounts across various financial assets, a reduction in the weight of deposits is evident. The study highlights two key channels through which digital payments influence financial behavior: enhancing subjective financial literacy and increasing households’ attention to financial information. The research emphasizes the role of digital payments in mitigating polarization effects in household financial asset allocation.

Suggested Citation

  • Shao-Chieh Hsueh & Shuoxun Zhang & Liming Hou, 2025. "Mitigating Financial Investment Polarization: The Role of Digital Payments in Enhancing Household Participation," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 61(1), pages 154-170, January.
    • Handle: RePEc:mes:emfitr:v:61:y:2025:i:1:p:154-170
    DOI: 10.1080/1540496X.2024.2379465
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