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Does Digital Financial Inclusion Reduce China’s Rural Household Vulnerability to Poverty: An Empirical Analysis From the Perspective of Household Entrepreneurship

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  • Shijiang Chen
  • Mingyue Liang
  • Wen Yang

Abstract

This paper evaluates the impact of digital financial inclusion (DFI) powered by digital technologies on rural household vulnerability to poverty based on data from the China Family Panel Studies (CFPS) and DFI data from the Institute of Digital Finance Peking University. The results show that both DFI and its secondary indicators reduce rural household vulnerability to poverty. Household entrepreneurship is an intermediary factor of DFI influencing vulnerability to poverty; that is, DFI stimulates rural households’ entrepreneurial behavior, thereby reducing their vulnerability to poverty. Through the analysis of income heterogeneity, financial development level, and human capital in the region, it is found that DFI is more helpful in reducing the vulnerability to poverty for rural households with low income, a low level of financial development and low human capital. Therefore, the Chinese government should map out the DFI development path, build a DFI control system with internet technologies, and actively play the mutually supporting role of DFI and other influencing factors to boost DFI development, minimize the risk of returning to poverty and thereby reduce rural household vulnerability in China.

Suggested Citation

  • Shijiang Chen & Mingyue Liang & Wen Yang, 2022. "Does Digital Financial Inclusion Reduce China’s Rural Household Vulnerability to Poverty: An Empirical Analysis From the Perspective of Household Entrepreneurship," SAGE Open, , vol. 12(2), pages 21582440221, June.
    • Handle: RePEc:sae:sagope:v:12:y:2022:i:2:p:21582440221102423
    DOI: 10.1177/21582440221102423
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    Cited by:

    1. 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.
    2. Lee, Chien-Chiang & Lou, Runchi & Wang, Fuhao, 2023. "Digital financial inclusion and poverty alleviation: Evidence from the sustainable development of China," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 418-434.
    3. Shao, KaiChao & Ma, Ruixue & Kamber, Joseph, 2023. "An in-depth analysis of the entrepreneurship of rural Chinese mothers and the digital inclusive finance," Telecommunications Policy, Elsevier, vol. 47(7).

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