The Impact Of China’s Digital Financial Inclusion Development On Urban And Rural Residents’ Entrepreneurship

In recent years,China’s economy has developed rapidly and has shifted from the stage of high-speed growth to a stage of high-quality development.The GDP has increased year by year,but there is still a problem of unbalanced economic development between urban and rural areas.In 2014,Premier Li Keqiang proposed "Mass Entrepreneurship and Mass Innovation",and various regions have also actively responded to the concept of "mass entrepreneurship and innovation",encouraging more people and more enterprises to join the ranks of innovation and entrepreneurship,giving full play to my country’s human resources advantages and stimulating market vitality.Entrepreneurship is an important force for economic development.Innovation and entrepreneurship can release tremendous creativity and inject new impetus into economic development.However,the gap in the level of entrepreneurial activities between urban and rural residents is also one of the reasons for the difference between urban and rural wealth.If we can promote the development of entrepreneurial activities of rural residents,promote the development of rural economy,and narrow the gap between urban and rural residents,it will also help improve the current situation of unbalanced development between urban and rural areas.Financial constraints are the main factor preventing entrepreneurs from carrying out entrepreneurial activities,and financial inclusion can alleviate the problem of insufficient funds for entrepreneurs and enhance residents’ willingness to start their own businesses.However,there are still some problems in the development of inclusive finance,such as insufficient risk control ability and imperfect credit relationship.The rapid development of digital technology has promoted the integration of finance and technology,and has also brought about digital financial inclusion.Digital financial inclusion can expand the coverage of financial services,alleviate financial exclusion,reduce transaction costs,and also improve the availability of financial services.It can provide entrepreneurs with more financing channels and better help entrepreneurs solve the problem of capital constraints.Therefore,it is of great significance to study whether digital financial inclusion can promote entrepreneurship of urban and rural residents.In order to explore the impact of the development of digital financial inclusion on entrepreneurship of urban and rural residents in China,this paper firstly expounds the research background and research significance,and composes the relevant domestic and foreign literature from three perspectives: the influencing factors of entrepreneurship,the development of digital financial inclusion,and the impact of digital financial inclusion on entrepreneurship,summarizes the existing research findings from the literature,finds the shortcomings,and proposes possible innovation points.Secondly,it explains the concepts of digital financial inclusion and entrepreneurship,introduces relevant theories and summarizes the influencing mechanism.Digital financial inclusion can not only directly promote entrepreneurship by broadening the channels for obtaining start-up capital and reducing the cost of start-up loans,but also indirectly affect entrepreneurship by promoting economic growth and creating a favorable market environment for entrepreneurship.After that,it discusses the development process of digital financial inclusion and analyzes the current development status of digital financial inclusion and entrepreneurship in China,laying a foundation for the empirical analysis.Finally,the research hypothesis is proposed.Panel data of 31 provinces(cities)in China from 2011 to 2019 are selected to establish a panel fixed effect model to explore the impact of digital financial inclusion on entrepreneurship of urban and rural residents from multiple perspectives,mainly including the impact of digital financial inclusion on entrepreneurship of urban and rural residents and its regional heterogeneity.And the impact of the three dimensions of digital financial inclusion on entrepreneurship of urban and rural residents.At the same time,the different impact of digital financial inclusion on entrepreneurship of urban and rural residents is compared to explore whether the development of digital financial inclusion in China can help narrow the gap between urban and rural entrepreneurship and contribute to reducing the gap between urban and rural wealth.The results of the study show that the development of digital financial inclusion can promote resident entrepreneurship and has a positive effect on the entrepreneurial activities of both urban and rural residents,with a slightly greater degree of impact on rural residents’ entrepreneurship.The regional heterogeneity results show that the level of resident entrepreneurship in both eastern and central urban areas is promoted by the development of digital financial inclusion.The eastern region has a greater impact,while the western region has no significant effect.The three dimensions of digital financial inclusion,namely,the coverage of digital finance,the depth of digital finance use,and the digitalization degree of inclusive finance,can promote urban and rural residents to carry out entrepreneurial activities,and the degree of impact does not vary significantly.Based on the findings of the empirical study,this paper makes the following recommendations.First of all,it is necessary to improve residents’ financial literacy.Digital financial inclusion is still new to some residents,especially rural residents.Helping residents to acquire more financial knowledge and capital management ability can make them trust in digital financial inclusion and provide them with more additional financing channels.Secondly,strengthen the construction of rural digital infrastructure.In order to better play the role of digital financial inclusion in promoting the entrepreneurship of rural residents and narrow the development gap between urban and rural areas,it is necessary to speed up the construction of rural networks,improve the rural credit reporting system,and increase the supervision of rural digital financial inclusion,so as to create favorable conditions for the development of rural digital financial inclusion.Thirdly,regional digital financial inclusion should be developed according to local conditions.The eastern region should focus on innovating characteristic services and developing new forms of business.The central and western regions should improve the foundation of digital financial inclusion and improve the level of development.Finally,using digital technology to enhance innovation capabilities,while focusing on supporting entrepreneurship,we should also constantly improve innovation capacity,which is an important foundation for the sustainable development of start-up companies.