A Study On The Impact Of Digital Inclusive Finance On The Urban-Rural Income Gap

Since the reform and opening up,China’s economy has been developing rapidly and the living standard of residents has been gradually improved.Although the income gap between urban and rural areas has also decreased to a certain extent,the improvement effect is still minimal compared with the national development rate.The persistence of the urban-rural income gap is likely to trigger the discontent of rural residents,intensify class conflicts,cause social unrest and hinder China’s sustainable economic development,therefore,how to properly solve this problem has become the focus of attention nowadays.Finance can play an important role in raising the income of rural residents and narrowing the income gap between urban and rural areas,but in reality,the "siphoning effect" of financial resources to rural areas is caused by the "rich-like-poor" and "profit-seeking" nature of financial resources.However,in reality,due to the "rich-poor" and "profit-seeking" nature of financial resources,urban areas have shown a "siphon effect" on rural areas,and financial institutions have become more urban-oriented,thus making it difficult for rural residents to enjoy the financial services they deserve.Especially with the development of digital technology in recent years,the emergence of digital inclusive finance has played a great role in further improving the accessibility of financial services and alleviating financial exclusion.In this context,this paper investigates the impact of digital inclusive finance on the urban-rural income gap.Firstly,this paper introduces the theory of binary economic structure,the theory of financial exclusion and the theory of financial inclusive growth to explain the theoretical logic of digital inclusive finance development on narrowing the urban-rural income gap and to lay the theoretical foundation for the hypothesis.Secondly,this paper finds that the urban-rural income gap in China has been narrowed to different degrees at the national,provincial and municipal levels through statistical analysis,and that digital inclusive finance has also been developing rapidly but with obvious geographical characteristics,and the development trend of the two is combined to infer that there is a certain correlation between the two.Again,this paper uses the Thayer Index and Peking University Digital Inclusive Finance Development Index from 2011 to 2020 for empirical analysis,and uses the panel fixed-effects model to study the impact of digital inclusive finance on the urban-rural income gap,and conducts heterogeneity analysis in terms of sub-dimensions and sub-regions,and further explores the non-linear relationship between digital inclusive finance and urban-rural income gap using the threshold effect model.The results show that: first,digital inclusive finance can meet the productive financing needs of rural residents,broaden their income channels and contribute to alleviating the urban-rural income gap;second,the convergence effect of digital inclusive finance on the urban-rural income gap is more obvious in the central and western regions,and in addition,combining the sub-dimensions,in the central and western regions,the coverage breadth and digitalization play a more significant role,while the convergence effect in the depth of use is mainly shown in the eastern region;third,the convergence effect of digital inclusive finance on the urban-rural income gap is greater when the depth of use is low,and the degree of this effect will decrease with the increase of the depth of use.Through theoretical combing and empirical analysis,this paper puts forward the following suggestions based on the research findings: firstly,China should accelerate the construction of digital infrastructure in rural areas to promote the development of local digital inclusive finance;secondly,in the process of promoting the integration of digital technology and traditional finance,differentiated development strategies should be adopted for different regions.Secondly,in the process of promoting the integration of digital technology and traditional finance,we should also adopt differentiated development strategies for different regions.