Research On The Impact Of Digital Finance On The Allocation Of Household Risky Financial Assets

In recent years,with the continuous reform of my country’s economic system,the household is the important unit in Chinese economic and social activities.Assets and wealth held by the household have been rapidly accumulated.The demand for financial investment and asset allocation of the household is also becoming increasingly complex and diverse.However,inadequate development of financial market,lagging supply of financial services,lack of investor education and other problems critically astrict the diversification of investment of Chinese residents.In addition,due to the "limited awareness" of risky financial assets and the preventive needs of Chinese families,there are some problems in the structure of household assets,such as single form,less holding of risky assets and extreme distribution of portfolio risk.But at the same time,with the rapid development of China’s economy,science and technology,digital technology has also been rapid development,China has realized leapfrog development in digital finance,leading position in the world.The rapid development of digital finance lowers the threshold of risky financial market,improves the availability of household credit,eases the constraints on household liquidity,and promotes the increase of household income.Chinese households also have a higher understanding of risky investment,and the frictional effect of financial market is reduced.It is feasible for households to participate in the investment of risky financial assets,so as to optimize their allocation of risky financial assets.Since the G20 International Summit in 2016,the Chinese government has elevated the development of digital finance to one of the country’s strategic goals,attaching great importance to the development of digital finance to better support the development of the real economy.As a new development orientation,digital finance can provide a full range of financial services for all social strata.Digital finance has become a new object of development and can provide diversified services for all social strata,effectively alleviating the problems of financial exclusion and single allocation of family assets,so as to improve people’s quality of life.In addition,it is difficult to fully participate in the offline financial market due to the unbalanced development between urban and rural areas and regions,as well as the backward hardware infrastructure in backward regions.As a result,some residents know little about the risk financial market.Digital finance has not only brought more convenient,effective and cost reducing services for people,but also brought huge potential for social development,promoted the allocation of household financial risk financial assets,and played the effect of universal benefit and poverty reduction.Based on this background,this paper studies the effect of digital finance on household risk financial asset allocation,which will enrich and deepen the understanding of household risk asset allocation.Through the research and analysis of the literature,the theory of financial exclusion,precautionary savings and asset portfolio is introduced to explain the theoretical logic that the development of digital finance affects the allocation of household risky financial assets,which provides the basis for the hypothesis.In addition,this paper also in-depth discusses the advantages of data finance,and analyzes how it promotes the allocation of household risk financial assets.Finally,on this basis,it makes a heterogeneity analysis to study the difference of the impact of digital finance on household risk financial assets allocation.Based on the questions in 2019 China Household Finance Survey(CHFS),this paper constructs household risk financial asset allocation indicators,including household risk financial market participation rate index,household risk financial market participation depth index and household risk financial market participation diversity index.In addition,it constructs digital financial index.Probit model is used to study the impact of digital finance on the participation rate of household risk financial market.Tobit model is used to study the impact of digital finance on the depth of participation in household risk financial market.ZIP model is used to study the impact of digital finance on the diversity of household risk financial market participation.This paper comprehensively examines the impact of digital finance on the allocation of household risk financial assets.Then the heterogeneity of urban and rural,regional and urban levels was studied.The robustness test was performed by controlling provinces and replacing explained variables,and then the endogeneity test was performed by adding the instrumental variable "monthly network communication cost".Finally,draw the corresponding conclusions,and put forward policy recommendations to match the conclusions.Based on the empirical results,this paper draws the following conclusions.On the one hand,the development of digital finance positively promotes the possibility of household allocation of risky financial assets and the depth and breadth of household allocation of risky financial assets.On the other hand,there are differences in the effects of digital finance on the allocation of household risky financial assets,which are as follows: First,digital finance has a stronger impact on rural areas in terms of the possibility,depth and breadth of the allocation of household risky financial assets;Secondly,digital finance has a stronger impact on the depth and breadth of risky financial asset allocation of households in cities outside the east and cities below the second-tier.Generally speaking,the development of digital finance can promote the allocation rate,depth and breadth of allocation of household risk financial assets.However,on this basis,the influence of digital finance on developed and backward areas is different,which is reflected in the difference between regions,urban and rural areas and different city levels.The impact of digital finance on backward regions is stronger than that on developed regions.Therefore,we believe that digital finance has certain universal and poverty reduction effects.Finally,based on the empirical research,this paper puts forward the following suggestions: Accelerate the development of digital finance,achieving more balanced development of financial markets,further regulate risky financial markets.