Research On Digital Finance,Financial Literacy And Urban Household Risky Financial Asset Portfolio Efficiency

With the high-quality development of Chinese economy and the arrival of digital economy era,household wealth has continued to rise,especially in urban areas.Only when family investors learn to use existing assets for sound financial investment and wealth management will they realize the increase in household property income and the preservation and appreciation of existing assets.From the perspective of the supply of financial products,the development of digital finance has prompted financial institutions to continue financial innovation to provide investors with more diversified financial products,which effectively alleviates the phenomenon of financial exclusion existing on the financial market,and promotes the advancement of information technology to reduce the cost of financial services and expand the scope of services for financial products.From the point of view of the financial needs of urban households,urban households in financial investment objective existence of demand will be increased with the increase of family income level,but due to the low overall financial literacy and risk tolerance of household investors,the problem of "limited participation" in the financial market is serious,which not only prevents households from using the financial market to effectively maintain and increase the value of their assets,but also hinders the healthy and orderly development of the financial market.Therefore,it is important to clarify the effect of digital finance and financial literacy on the mechanism of the financial portfolio held by urban households,and to explore the effectiveness of digital finance and financial literacy on the behavior of urban residents,which is of great theoretical and practical significance to enrich theories related to family finance,guide families to make reasonable and effective financial investment,add household property income and make financial market healthy and orderly development.This article takes digital finance,financial literacy,and the effectiveness of urban household risky financial asset portfolio as the research object,analyzes the mechanism and effect of digital finance and financial literacy on the effectiveness of urban household risky financial asset portfolio from the theoretical and empirical perspective,and puts forward policy recommendations to improve the effectiveness of urban household financial asset portfolio.First,this article provides a literature review around the factors affecting household financial asset allocation,the influence of digital finance and financial literacy on household financial asset allocation.Secondly,based on the asset allocation theory,modern portfolio theory and behavioral finance theory,this article discusses the digital finance influence urban household risky financial asset portfolio efficiency,financial literacy affects urban household risky financial asset portfolio efficiency and digital finance by changing urban families financial literacy to influence on the effectiveness of urban families risky financial assets combination mechanism,and puts forward the relevant research hypothesis.Then,this article selects the Peking University Digital Financial Inclusion Index as the digital financial indicator,and uses factor analysis to construct the financial literacy index of urban households based on the answers to 9 questions related to the financial literacy of urban residents in the 2019 China Household Finance Survey Data(CHFS)questionnaire,and draws on previous scholars to construct the Sharpe ratio index to measure the effectiveness of urban household risky financial asset portfolio.Finally,this article uses the Tobit model to prove the effect of digital finance and financial literacy on the effectiveness of urban household risky financial asset portfolio,and uses the stepwise regression method and Bootstrap method to confirm some of the intermediary effects of financial literacy in the effectiveness of digital finance on urban household risky financial asset portfolio according to the financial literacy intermediary effect model,and draws relevant conclusions and puts forward some targeted suggestions.This article conclusions drawn in this paper mainly include the following points:(1)The development of digital finance will increase the effectiveness of urban household risky financial portfolios in China,especially for the urban households in the eastern region,the elderly group urban households or the urban household with "lower financial literacy".(2)The improvement of the financial literacy of urban residents also promotes the increase in the effectiveness of the risky financial asset portfolio of urban residents,especially for the urban households in the eastern region or the elderly group urban households.(3)Digital finance can improve the effectiveness of household financial portfolio by changing the financial literacy of urban households.As household financial literacy improves in urban areas,the effectiveness of household financial portfolios will increase.Based on the goal of improving the effectiveness of urban households’ risky financial asset portfolio,this article puts forward the following suggestions from the level of urban households,financial institutions and governments:(1)Urban household investors should learn to use digital finance to access more financial related information,products and services,improve their financial literacy level,and reasonably view the risks and benefits of financial investment.(2)Financial institutions can use digital finance to improve residents’ financial literacy level,correctly guide households to reasonably participate in the financial market,and carry out targeted financial product innovation.(3)Government departments can use digital finance to strengthen the popularization of financial education,improve the level of financial literacy of families,increase financial investment in financial education,and promote the further development of digital finance.