The Impact Of Digital Financial Development On Household Financial Market Participation

Household financial investment is one of the important micro-economic decisions.It is closely related to the quality of life of Chinese residents.In the Fifth Plenary Session of the 19 th Central Committee of the Communist Party of China,it was clearly proposed to use diversified ways to increase the property income of urban and rural people and its proportion to the total income of all households.In recent years,as a new financial model,digital finance plays an important role in the modern financial system,and also has a profound impact on family financial behavior.The impact of digital finance on household financial market participation is the core issue of this paper.This paper first conducts theoretical analysis and proposes research hypotheses based on literature review.Next,this paper uses the Beijing University digital financial index data and Chinese household financial survey questionnaire data,using panel random effect model to study the relationship between the development of digital finance and family financial market participation.Firstly,the influence of digital financial development on household financial market participation is studied from whether or not to participate and in depth.Secondly,the influence of digital financial development on household financial market participation is studied from the sub-indexes of three different dimensions of digital financial index,and a series of robustness tests are carried out.Then it verifies the three impact mechanisms of digital finance promoting family financial market participation.Finally,this paper conducts heterogeneity analysis from three aspects:urban and rural areas,regions,and different types of asset participation.The empirical results found that the development of digital finance has a significant positive effect on household financial market participation.Compared with digital support services,coverage breadth and depth of use play a greater role.The mechanism analysis shows that the development of digital finance has significantly promoted family financial market participation.It made an impact through three paths: increasing household investment convenience,easing liquidity constraints and improving financial knowledge.Further research shows that the promotion effect of digital finance on family financial market participation is more obvious in rural families,eastern and central families.In addition,in different types of financial markets,the development of digital finance will promote family participation in the stock market and financial product market,and inhibit family folk lending.This paper gives four suggestions according to the above analysis conclusions.Firstly,the relevant departments should actively promote the development of digital finance and accelerate the transformation of financial institutions to digital services.Vigorously popularize financial knowledge,improve the level of residents’ financial expertise,and guide residents to invest reasonably;furthermore,when formulating policies,the government can focus on improving the construction of digital financial facilities in underdeveloped regions and reducing the digital divide.At the same time,the financial system institutions should create characteristic products and services.