Digital Inclusive Finance and Rural Household Income: An Empirical Study
Keywords:
digital inclusive finance, rural household income, coverage breadth, regional heterogeneity, digital infrastructureAbstract
Based on panel data from 31 provinces, autonomous regions, and municipalities in China between 2011 and 2020, this study employs a fixed-effects model to investigate the impact mechanisms and outcomes of digital inclusive finance on rural household income. The empirical results indicate that, overall, the expansion of digital inclusive finance has significantly contributed to income growth among rural residents. A more detailed examination of sub-dimensions reveals that the breadth of coverage exerts a particularly strong positive influence, while the effects of usage depth and the level of digitalization are relatively less pronounced. This suggests that ensuring widespread access to digital financial services is more critical for enhancing rural income than merely deepening the intensity or sophistication of usage. Further analysis of regional differences demonstrates that the western region of China has experienced more substantial benefits from the development of digital inclusive finance compared to other regions. This finding underscores the importance of considering regional heterogeneity when formulating policies aimed at promoting digital financial inclusion and rural economic development. Moreover, the study highlights a clear "threshold effect" associated with rural digital infrastructure. Specifically, when digital infrastructure reaches a certain level, the marginal promoting effect of digital inclusive finance on rural income growth diminishes. This phenomenon suggests that while initial investments in digital infrastructure can substantially boost the effectiveness of digital financial services, the incremental benefits may taper off once a baseline level of infrastructure maturity is achieved. These findings provide both empirical evidence and a theoretical foundation for improving the rural financial service system, optimizing strategies for digital inclusive finance, and enhancing the income potential of rural households. The results carry particular significance for the implementation of rural revitalization strategies and the advancement of urban-rural integration, offering valuable guidance for policymakers seeking to leverage digital finance as a tool for inclusive economic growth.
References
1. X. Chen, H. Wei, and Y. Song, "Rural revitalization in China," Springer: Berlin/Heidelberg, Germany, 2023.
2. Y. Liu, and M. Zhou, "Can rural e-commerce narrow the urban-rural income gap? Evidence from coverage of Taobao villages in China," China Agricultural Economic Review, vol. 15, no. 3, pp. 580-603, 2023. doi: 10.1108/caer-09-2022-0221
3. X. Dai, and J. Zhang, "China's green development journey through resource rent optimization and green finance policies," Resources Policy, vol. 90, p. 104768, 2024. doi: 10.1016/j.resourpol.2024.104768
4. I. Hossain, "Financial Inclusion in Bangladesh Through Mobile Financial Services: a case study on marginal agricultural peoples of Bangladesh," 2023.
5. K. Zhu, and L. Guo, "Financial technology, inclusive finance and bank performance," Finance Research Letters, vol. 60, p. 104872, 2024. doi: 10.1016/j.frl.2023.104872
6. R. Luo, X. Chen, and Z. Ding, "SeqUDA-Rec: Sequential user behavior enhanced recommendation via global unsupervised data augmentation for personalized content marketing," arXiv preprint arXiv:2509.17361, 2025.
7. P. Peng, and H. Mao, "The effect of digital financial inclusion on relative poverty among urban households: a case study on China," Social Indicators Research, vol. 165, no. 2, pp. 377-407, 2023. doi: 10.1007/s11205-022-03019-z
8. W. Wang, T. He, and Z. Li, "Digital inclusive finance, economic growth and innovative development," Kybernetes, vol. 52, no. 9, pp. 3064-3084, 2023. doi: 10.1108/k-09-2021-0866
9. A. S. Kasiisii, S. Mariadoss, and S. A. R. Golden, "The effectiveness of digital financial inclusion in improving financial capability," International Journal of Professional Business Review: Int. J. Prof. Bus. Rev, vol. 8, no. 5, p. 4, 2023.
10. J. Liu, and Y. Ren, "Can digital inclusive finance ensure food security while achieving low-carbon transformation in agricultural development? Evidence from China," Journal of Cleaner Production, vol. 418, p. 138016, 2023. doi: 10.1016/j.jclepro.2023.138016
11. T. Zhao, and F. Jiao, "Does digital financial inclusion promote common prosperity? The role of regional innovation," Electronic Commerce Research, vol. 25, no. 5, pp. 3451-3476, 2025. doi: 10.1007/s10660-023-09797-z
12. S. Jin, and Z. Zhong, "Impact of digital inclusive finance on agricultural total factor productivity in Zhejiang Province from the perspective of integrated development of rural industries," Plos one, vol. 19, no. 4, p. e0298034, 2024. doi: 10.1371/journal.pone.0298034
13. L. Jin, and M. Liu, "Unlocking financial opportunities: The substantial alleviation of financing constraints on small and micro enterprises through digital inclusive finance," Journal of the Knowledge Economy, vol. 16, no. 1, pp. 2283-2309, 2025.
14. Q. Li, and Q. Liu, "Impact of digital financial inclusion on residents' income and income structure," Sustainability, vol. 15, no. 3, p. 2196, 2023. doi: 10.3390/su15032196
15. L. M. Wang, X. L. Wu, and N. C. Chu, "Financial development, technological innovation and urban-rural income gap: Time series evidence from China," PloS one, vol. 18, no. 2, p. e0279246, 2023.
16. C. Li, Y. Fang, Y. Wang, Y. Xu, Z. Zong, Y. Yang, and M. Wang, "How can tourism help to revitalize the countryside? Content analysis based on the case of tourism enabling rural revitalization: C," Li et al. Environment, Development and sustainability, vol. 26, no. 8, pp. 20333-20354, 2024.
