The Impact Of Digital Inclusive Finance On Urban-rural Income Gap

China’s urban-rural dual pattern has a long history,resulting in the imbalance between urban and rural areas,which further deepened the income gap between urban and rural residents.With the popularization of the Internet,the development of Inclusive Finance has expanded the traditional financial business,greatly reduced the cost of traditional financial services,and provided more diversified services for various financial services and consumption of rural residents.Based on the existing research results,this thesis analyzes the effect of the development of digital Inclusive Finance on the income gap between urban and rural residents in China from both theoretical and empirical levels.In theory,this thesis sorts out the relevant theories of Financial Exclusion,inclusive growth and income distribution,and believes that digital inclusive finance can solve the problem of income gap between urban and rural residents to a certain extent.In the empirical aspect,based on the panel data of cities from 2011 to 2019,with the Theil index as the explanatory variable and the digital inclusive finance index as the explanatory variable,this thesis studies the role of the development of digital Inclusive Finance on the income gap between urban and rural residents in China by using the fixed effect model and other methods.The results show that there is an obvious negative relationship between the development degree of China’s digital Inclusive Finance and the income gap between urban and rural residents.The development of digital inclusive finance can effectively narrow the gap.This thesis makes an endogenous analysis by using the indicator of the distance between prefecture level cities and Hangzhou.Through the further study of digital Inclusive Finance,this thesis finds that digital Inclusive Finance has a more obvious impact on regions with low level of traditional financial development and weak digital infrastructure.By introducing the threshold of digital inclusive finance indicators,this thesis finds that there are two thresholds and the higher the development level of digital Inclusive Finance,the more obvious the effect of digital Inclusive Finance is.In addition,in the mechanism analysis,this thesis believes that the development of digital inclusive finance can effectively improve the economic growth of rural residents,so as to narrow the income gap between urban and rural areas,and will play this role by promoting urbanization.Finally,through a series of robustness tests to ensure that the conclusions are reliable.The conclusion of this thesis will help to clarify the relationship between the development of China’s digital Inclusive Finance and the income gap between urban and rural residents,and put forward some suggestions for promoting the development of digital Inclusive Finance and further improving China’s income distribution.