Research On The Poverty Reduction Effect Of Digital Financial Inclusion On Relative Poverty In Rural Areas

After rapid development in recent years,China is now a global leader in the development of mobile payment technology and e-commerce,and is uniquely positioned to develop digital inclusive finance,promote poverty alleviation and achieve inclusive growth.Relative poverty alleviation is an inevitable requirement for China to achieve rural revitalization,promote common prosperity,and promote a new development pattern of "domestic-oriented and internal-external linkage" with dual domestic and international cycles.However,from the literature,we found that there are not many specific research results on the alleviation of relative poverty in rural areas by digital inclusive finance.This paper explores whether digital inclusive finance can alleviate rural relative poverty as a research theme,and explores the mechanism of digital inclusive finance to help alleviate rural relative poverty,which is of great theoretical and practical significance.This paper firstly systematically compares the representative research results on digital inclusive finance and relative poverty at home and abroad,and then elaborates the impact mechanism of digital inclusive finance on relative poverty in rural areas in China based on the long-tail theory,financial exclusion theory and endogenous economic growth theory as the theoretical basis.Based on the availability and scientificity of data and indicators,this paper selects the required variables and constructs a Probit model of the relationship between digital inclusive finance and rural relative poverty with the help of the "China Digital Inclusive Finance Development Index" of Peking University and the China Family Panel Studies(CFPS)data,and conducts a study on the relationship between digital inclusive finance and rural relative poverty.The relationship between digital inclusive finance and rural relative poverty is validated,and then a sub-sample regression is used to discuss whether there is heterogeneity in the impact of digital inclusive finance on rural relative poverty by region and by age group.The results show that digital inclusive finance is significantly and negatively correlated with rural relative poverty,that is,digital inclusive finance has a significant alleviating effect on rural relative poverty,and the poverty reduction effect is higher in the central and western regions than in the eastern regions,and the poverty reduction effect is also significantly higher in the rural youth and middle-aged groups than in the rural elderly relative poverty groups.To ensure the robustness of the empirical results,the endogeneity of the model is tested by the instrumental variables method,and the poverty reduction effect of digital financial inclusion on rural relative poverty is further verified by transforming the econometric analysis method,replacing the explanatory variables and replacing the original analysis data.Meanwhile,this paper also synthesizes the CFPS2018 and CFPS2016 data into a short panel for dynamic analysis and empirically analyzes the mechanism of the effect of digital inclusive finance on rural relative poverty using a mediating effects model,and the results show that digital inclusive finance can indirectly reduce the probability of rural relative poverty occurrence by promoting rural residents’ entrepreneurship and alleviating rural credit constraints.It has been proved that developing digital inclusive finance is an important way to achieve catch-up in economically backward rural areas.Therefore,this paper argues that in terms of giving full play to the direct utility of digital inclusive finance in alleviating rural relative poverty,the basis and prerequisite for maximizing the benefits of rural relative poverty alleviation is the need to strengthen the construction of rural information infrastructure and enhance the service level of digital inclusive finance in rural areas.In terms of indirect utility,stimulating the willingness of relatively poor farmers to start their own businesses,increasing their initiative to escape poverty and strengthening the rural economy,and relaxing loan restrictions for relatively poor farmers are important measures to promote the sustainable development of digital inclusive finance.In addition,providing differentiated policy support at different levels and optimizing financial market supply can help form an inclusive digital inclusive financial system.Finally,improving the regulatory system of digital inclusive finance and strengthening financial risk prevention are powerful guarantees to promote the sustainable and healthy effect of digital inclusive finance in alleviating relative poverty.