Research On The Impact Of Digital Inclusive Finance Development On The Income Gap Between Urban And Rural Areas

Since the implementation of the reform and opening-up policy,the economic in China has grown rapidly and the living standard of residents has generally improved,but the problem of urban-rural income disparity is still serious.Excessive urban-rural income disparity will seriously restrict the sustainable development of China’s economy and is not conducive to achieving the strategic goal of balanced urban-rural development.Therefore,convergence of the urban-rural income gap has become an important issue in the process of China’s economic development.As the core of modern economy,finance plays an important role in optimizing the urban-rural income gap,especially digital inclusive finance can break through the development dilemma of traditional finance by using technology.Therefore,it is of great practical significance to explore the path of improving the urban-rural income gap from the perspective of digital inclusive finance.However,since digital inclusive finance was first mentioned,academic research on its impact on income disparity has not been in-depth enough to provide favorable guidance for improving the urban-rural wealth gap in practice.Therefore,this paper analyzes the impact of digital inclusive finance development on the urban-rural income gap from both theoretical and empirical perspectives.Specifically,this paper explores the following three questions: First,whether digital inclusive finance has an impact on the urban-rural income gap.Second,if there is an impact,what is the impact mechanism.Third,what measures should be taken in China to promote digital inclusive finance to play its role and effect.First,the answers to the first two questions are explored from the theoretical level.The first is to analyze the direct impact effect.The analysis results show that digital inclusive finance can directly affect the urban-rural income gap by lowering the cost of services,alleviating geographical exclusion and product exclusion,and widening the channels for increasing income in three ways: lowering the threshold effect,inclusion effect and poverty alleviation effect.Secondly,the discussion analyzes the non-linear threshold effect,and the analysis results show that there are numerical threshold,human capital and income threshold in the relationship between the two.Third,the analysis of the impact mechanism is discussed,and the results show that rural human capital,resident entrepreneurship and non-farm employment play a mediating role in the relationship.Second,based on the provincial macro data from 2011-2020,the results of the theoretical analysis are empirically tested by combining the fixed effect model,the threshold effect model and the mediating effect model,and the following conclusions are drawn:(1)The overall development of digital inclusive finance has a significant negative effect on the urban-rural income gap,especially in western regions,regions containing poor counties,low urbanization and low education level regions with stronger(2)The development of all dimensions of digital inclusive finance also has a significant negative impact on the urban-rural income gap,and the effect of coverage breadth is the strongest.The effect of each dimension index also differs in different quartiles,and the inhibitory effect gradually increases as the quartiles increase.The development of various functional services of digital inclusive finance has a significant inhibitory effect on the urban-rural income gap,and the effect of credit index is the strongest.(3)There is heterogeneity in the effect of digital inclusive financial development on various urban-rural income disparities,it has a significant negative effect on wage and transfer income disparities,a significant promoting effect on business income disparities,and a less significant effect on property income disparities.(4)Digital divide,human capital and farmers’ income threshold are significantly present in the relationship.(5)Digital inclusive financial development acts on the urban-rural income gap through rural human capital,resident entrepreneurship and non-farm employment channels,and the test results are robust.Finally,based on the theoretical analysis and empirical results,this paper answers the third question,which is to put forward four suggestions: First,to implement different measures for developing digital inclusive finance.Second,to expand the financial coverage mainly,supplemented by expanding the depth and digitization,and give full play to all the advantages of digital inclusive finance.Third,it will increase network infrastructure in rural areas,strengthen the financial knowledge training of farmers,and increase the assistance to increase their income.Fourth,flexibly adjust the central bank’s assessment for local financial institutions to improve their subjective initiative in carrying out digital inclusive finance business,and open up indirect influence channels.