Research On The Impact Of Digital Inclusive Finance On Inclusive Growth In China

Since the 20th century,the world economy has grown rapidly,but the problem of income and opportunity unfairness has become increasingly prominent.Therefore,it has been become an important topic in all countries of the world to change the mode of economic development and promote inclusive growth.In 2010,Hu Jintao emphasized at the 5th APEC meeting that China should change its existing development mode and promote inclusive growth.In 2017,Li Keqiang said in the Summer Davos Forum that China will promote more inclusive growth and enhance social equity and develop inclusiveness to achieve sustainable growth.In recent years,digital inclusive finance has been widely regarded as an important way to promote inclusive growth because it can fully utilize its technological advantages and break through the obstacles faced by traditional financial service models.In 2016,the G20 Hangzhou Summit pointed out that all of the countries should seize the opportunities in the digital age and promote inclusive growth by upgrading digital inclusive financial services.The 26th APEC Business Leaders Summit in 2018 also conveyed this view with the theme of "Capturing Inclusive Opportunities and Embracing the Digital Future"However,compared with the practice of actively using digital inclusive finance to promote inclusive growth,the current academic research on the relationship between digital inclusive finance and inclusive growth is relatively scarce,and it is difficult to provide strong guidance for practice.Therefore,this paper attempts to explore the impact of digital inclusive finance on inclusive growth from both theoretical and empirical angles,and,hence,will have a significant practical and theoretical contribution for promoting China’s economic and social development Specifically,this paper focuses on the following three questions.(1)Does digital inclusive finance really have an impact on inclusive growth?(2)What is the mechanism of this influence,specifically,the impact effect,the conduction channel,and the microscopic subject,if the influence exists?(3)What measures should China take to develop digital inclusive finance and increase the level of inclusive growth?To start with,this paper uses the theoretical analysis method to explore the answers to the first two questions.Firstly,this paper construct a mathematical model to demonstrate the positive effect of digital inclusive financial development on inclusive growth.It proves that digital inclusive finance is beneficial to borrowers with more low risk but no collateral to obtain larger and lower-cost credit funds,effectively alleviating financing problems,thereby inspire the vitality of micro-subjects,promote economic development,narrow the income gap and achieve inclusive growth.The second step is to further analyze the impact mechanism.The results show that the three sub-effects of digital inclusive finance affecting inclusive growth are the economic growth effect,the income distribution effect and the opportunity fairness effect;the transmission channels are innovation,human capital and investment;the main subjects mainly includes rural residents and small and medium-sized enterprises.Then,based on macro data and micro survey data,this paper tests the reliability of theoretical analysis results by means of fixed effect model,mediation effect model and structural equation model,and draws the following conclusions.(1)The impact of digital inclusive finance on inclusive growth is significantly positive,especially in central and western China where the inclusive growth index is low.(2)In terms of the effect of economic growth,digital inclusive finance has significant impact on GDP and fiscal revenue,but has no significant impact on industrial structure.In terms of income distribution effect,digital inclusive finance,especially its coverage,is conducive to narrowing the income gap,but the influence of the breadth of digital inclusive financial coverage in the central and western regions is slightly weaker.In terms of the fairness effect of opportunities,the positive impact of digital inclusive financial development on the fairness of opportunities is significant and robust.(3)The development of digital inclusive finance affects the inclusive growth through the transmission channels of innovation,human capital and investment.Moreover,the transmission of invention patent applications,rural human capital and private enterprises’ fixed investment channels is greater than others.(4)Both rural residents and small and medium-sized enterprises can benefit from digital inclusive financial services.However,rural residents can benefit from digital payment and lending services,but not from digital investment and insurance services.While SMEs can benefit from digital lending and insurance services,but not from digital investment services.In addition,the smaller the companies,the better they can benefit from the development of digital inclusive finance.Finally,the paper answers the third question based on the above conclusions.Combining the results of theoretical and empirical analysis with the actual problems in China,this paper believes that in the future,we should take the following five measures to promote the inclusive financial development and hence to improve the level of inclusive growth in China:optimizing the market environment,Improve the multi-level service system,consolidating the technical foundation,unblocking the transmission channels,increasing the support for the development of rural areas,and improving the ability to serve small and medium-sized enterprises.