The Impact Of Financial Inclusion On High-quality Development Of China’s Economy

With China’s economy stepping into the new normal,Chinese economic development has bid farewell to the stage of simply pursuing speed catch-up and quantity surpassing and entered a high-quality development stage focused on quality and efficiency,which will be the theme of China’s economic and social development during“the 14^thFive-Year Plan”period and beyond.As financial system and real economy are the main carriers of resource allocation,the smooth circulation of them plays a key role in the stability of macro-economy and is also the inevitable requirement to achieve high-quality development.Under the background of Five Concepts for Development of“innovation,coordination,green,openness and sharing”and the Five-pronged Comprehensive Strategy,it is necessary to promote the construction of financial inclusion system,solve the contradiction between insufficient supply of financial services demand and structural imbalance so as to realize efficient resource allocation and better serve the pattern of high-quality development.Therefore,the intrinsic relationship between financial inclusion and high-quality economic development needs to be further investigated from theoretical and empirical perspectives.In light of this issue,the current study investigates the impact of financial inclusion on high-quality economic development based on theory,mechanism,empirical simulation and policy.Firstly,this paper systematically reviews the theoretical progress of financial inclusion and high-quality economic development as well as the internal transmission mechanism between them.Secondly,starting from the four aspects of economic coordination,scientific and technological innovation,green development and economic vitality of high-quality development,this paper makes an empirical and numerical simulation analysis of the financial inclusion impact on high-quality economic development by using econometric and mathematical model methods such as static panel regression,threshold panel regression,spatial panel regression and DSGE model,then it uses the intermediary effect model and interaction effect model to test the transmission mechanism of financial inclusion’s influence on high-quality economic development.Finally,based on the empirical results,the paper puts forward policy suggestions on improving financial inclusion to promote high-quality economic development.The present study produced a number of important findings.（1）Financial inclusion plays a significant role in promoting coordinated economic development.Improving financial permeability and the effectiveness of financial services can markedly promote the coordinated economic development,while reducing the financial burden can also evidently enhance coordinated economic development.In terms of regions,financial inclusion obviously promotes the coordinated economic development of the eastern region,especially in respect of financial permeability and the effectiveness of financial services,while financial inclusion has less overall promotion on the coordinated economic development of the Midwestern regions,and only financial affordability apparently promotes the coordinated economic development of the Midwestern regions.The promotion of financial permeability and the effectiveness of financial services are very limited.The impact mechanism shows that the efficiency of financial resource allocation has a significant intermediary effect,and in addition to financial permeability,the utility and affordability of financial services can indirectly promote the coordinated economic development through the intermediary effect of human capital accumulation.（2）Financial inclusion plays a significant role in promoting the scientific and technological innovation,and this role will show nonlinear characteristics due to the different levels of financial inclusion development,economic development and human capital accumulation.When it comes to regions,financial inclusion in the eastern and Midwestern regions has a threshold effect on the scientific and technological innovation,and the role of financial inclusion in the eastern region in promoting the scientific and technological innovation is mainly determined by financial permeability and financial service utility,while the role of financial inclusion in the Midwestern regions in promoting the scientific and technological innovation is mainly decided by financial affordability.The impact mechanism shows that whether taking financial inclusion itself or taking economic development level and human capital as threshold variables,financial inclusion indirectly affects the scientific and technological innovation through intermediate channels such as technological progress and financial resource allocation efficiency.（3）Financial inclusion has a significant spatial spillover effect on green development,and this effect mainly comes from the financial burden.Specifically,the spatial spillover effect brought by the interval flow of financial permeability,financial utility and financial burden will have an important impact on regional green development.The spatial spillover effect of financial permeability and financial utility accounts for more than 50%of the total effect,and the spatial spillover effect of financial burden also accounts for 29%of the total effect.The impact mechanism shows that financial inclusion indirectly promotes green development mainly by improving technological progress and the efficiency of financial resource allocation.（4）Economies with higher financial inclusion can improve the allocation efficiency of financial markets,so as to amplify the promotion of positive technological shocks on real economic variables such as output,consumption,investment and employment.Moreover,higher financial inclusion better plays the stability effect of financial markets,so as to effectively mitigate the inhibitory effect of negative liquidity risk and monetary policy impact on the vitality of the real economy.Simultaneously,empirical evidence also shows that the overall indicators of financial inclusion can significantly promote economic vitality.Improving financial permeability and the effectiveness of financial services can significantly enhance economic vitality,and reducing the financial burden can also significantly promote the vitality of the real economy.Based on the above theoretical and empirical results,this paper proposes 1)to build a financial inclusion service system to provide equitable financial services for high-quality economic development;2)to improve the effect of financial inclusion services and provide financial momentum for high-quality economic development;and 3)to improve the guarantee system of financial inclusion and create a financial system environment for high-quality economic development,so as to better develop the positive effect of financial inclusion in promoting high-quality economic and social development.