Research On The Impact Of Digital Finance Development On Residents' Consumption

With the slowdown of economic globalization and even the emergence of anti-globalization,the supporting role of external demand for economic development has gradually faded.It is imperative that through the "domestic demand-driven"model of "consumption drives production,production creates income,and income drives consumption again" to promote economic development,among which stimulating domestic consumption and creating new economic growth points become the key.With the technological innovation of information technology,the Internet and big data,the digital finance has ushered in a leap-forward development,providing a new path to solve the consumption problem.The digital finance has brought a series of changes to the financial market with its unique innovative advantages,and has gradually become a new engine behind consumer consumption.Firstly,the digital finance has expanded the coverage of financial services,enabling disadvantaged groups who would otherwise not have access to formal financial services to obtain financial services,improving the availability of credit products for residents,which optimizes the efficiency of credit resource allocation,and enriching investment and financial management methods,which promotes the effectiveness of residents' asset portfolios,then influence the residents' consumption ability and willingness to spend.Secondly,the digital finance in the payment field has enabled consumption to achieve a leap in time and space,making payment more convenient and faster,reducing consumption costs,enriching life application scenarios,improving consumers'psychological experience,and increasing the randomness and unexpectedness of consumption,all of which can affect residents'consumption habits.Finally,the role of digital finance in promoting consumer consumption is not only reflected in providing consumers with inclusive financial services,but also in promoting entrepreneurial innovation by alleviating corporate financing constraints,which can bring technological progress and industrial structure upgrades,and then lead to the higher level of output,the enrichment of supply-side product categories and the improvement of product quality,thereby bringing new consumption growth points.Therefore,in the context of the long-term sluggish consumption rate of Chinese residents and the domestic and international dual-cycle social background,how to further release consumption potential through the digital finance to promote residents' consumption is worthy of our careful studyThis article studies the impact of digital finance on residents' consumption level and consumption structure from multiple perspectives,and focuses on answering three questions:the basic question-whether digital finance can significantly improve residents' consumption level and promote the upgrading of consumption structure;the core questions-the internal mechanism of the digital finance to improve the consumption level and promote the upgrading of consumption structure of residents;the extended question-whether there is a difference in the impact of digital finance on urban and rural residents' consumption.For the first question,this paper empirically tests the impact of digital finance on residents' consumption level and consumption structure,and conducts out robustness test.For the second question,this paper analyzes the theoretical mechanism of the digital finance influencing residents'consumption level and consumption structure from the consumer demand side and product supply side,and conducts an empirical test based on the theoretical mechanism analysis.The residents' income levels,liquidity constraints,uncertainty,payment environment,entrepreneurship and innovation are used as intermediary variables to test the influence mechanism of digital finance on residents' consumption level and consumption structure,and conduct a heterogeneous analysis of the impact of digital finance on different consumer groups.For the third question,under the background of our country's urban-rural dual economic structure,this paper uses micro-data to study the differences in the impact of digital finance on urban and rural household consumption,and analyzes the reasons for the differences based on the influence mechanism.The heterogeneity analysis is carried out in combination with the characteristics of the residents' families.Based on the above research and analysis,the main research conclusions of this paper can be summarized into the following five aspects:First,the impact of the digital finance on the consumption level and consumption structure of residents.In the case of gradually adding control variables,the digital finance can significantly improve the consumption level of residents and promote the upgrading of consumption structure.The secondary index of digital finance(coverage breadth,depth of use,and digitization)and tertiary index(payment and insurance)can significantly promote the improvement of residents' consumption and promote consumption structure upgrade.The robustness test was carried out by means of one lag of the core explanatory variables,regression of instrumental variables and replacement of explained variables.It is found that the conclusion that the digital finance promotes the improvement of residents' consumption level and promotes the upgrading of consumption structure is sound.Second,the mechanism of the digital finance affecting residents' consumption level and consumption structure upgrading.The digital finance can improve the consumption level by improving the income level of residents,but it cannot promote the upgrading of consumption structure by improving the income level,which indicates that the impact of the income growth effect of digital finance on the consumption is still limited to the amount of consumption,but has not yet had a qualitative impact on the consumption structure.The digital finance cannot significantly increase the consumption level by promoting the purchase of commercial insurance,but it can promote the upgrading of the consumption structure of residents by promoting the purchase of commercial insurance.This shows that the development of digital finance has promoted the purchase of commercial insurance and has a crowding-out effect on other consumption.This also shows that the changes in the consumption structure brought about by the digital finance in promoting the purchase of commercial insurance are shallow,and have not really improved the consumption utility of residents.The development of digital finance can improve residents'consumption level and promote the upgrading of consumption structure by alleviating residents' liquidity constraints and optimizing the payment environment.The digital finance can improve the consumption level of residents by increasing the frequency of regional entrepreneurship,and promote the upgrading of consumption structure by improving the level of regional innovation.Third,the heterogeneity of the impact of digital finance on the consumption level and consumption structure of different consumer groups.The sub-sample regression of different regions found that the impact of digital finance on the western region is mainly the increase in the consumption level of residents,which has a small impact on the consumption structure of residents;for the central region,it does not promote the overall consumption level of residents,but improved the consumption structure of residents;for the eastern region,the digital finance can not only promote the improvement of residents' consumption level,but also promote the upgrading of residents' consumption structure.The promotion effect of digital finance on the consumption level and the consumption structure in the high-income group and the high-human capital group is higher than that in the low-income group and the low-human capital group.The digital finance has a greater impact on groups with high consumption levels,at the 10%quantile of household consumption,the impact of digital finance on household consumption is not significant,starting from the 30%quantile,the coefficient of digital finance is significant,and its influence is getting bigger and bigger.Fourth,the impact of the digital finance on household consumption under the dual economic structure of urban and rural areas.The digital finance can increase the consumption levels of rural and urban households at the same time,and it has a greater effect on the consumption of urban residents than rural households.The secondary indicators of digital finance have a significant positive impact on the household consumption,the coverage breadth and the digitization level has a greater effect on rural residents' consumption,and the depth of use has a greater effect on urban residents' consumption.The tertiary indicators(payment,insurance and credit)of digital finance have a significant positive impact on the household consumption.The robustness test is carried out by means of the core explanatory variable lagging one period,instrumental variable regression and mixed cross-section regression.It is found that the conclusion that the digital finance promotes the household consumption of urban and rural residents is robust,and the influence of digital finance on the household consumption of urban residents is greater than that of rural residents.In terms of influence mechanism,the digital finance can increase household income of urban residents to promote household consumption,but it cannot increase household consumption by promoting rural household income;In rural areas,the development of digital finance has a "replacement and supplementary" effect on credit cards,alleviating the mobility constraints of village residents,thereby promoting residents'consumption,but in urban households this mechanism is not clear;The digital finance can promotes residents' consumption by reducing income uncertainty and promoting payment convenience in both rural and urban families.It has a greater impact on urban areas in reducing income uncertainty,and it has a greater impact on rural areas in optimizing the payment environment.Fifth,the heterogeneity of the impact of digital finance on the consumption level of different consumer groups under the urban-rural dual economic structure.In both urban and rural areas,the digital finance promotes the consumption of high-income households more than low-income households;and it has a greater effect on the consumption level of households with higher financial literacy than households with lower financial literacy;the promotion effect on development and enjoy consumption is higher than that on basic living consumption.According to the age of the head of a household,digital finance does have a different impact on different age groups,there is a digital divide for the elderly,but the difference between rural and urban areas is not consistent,urban residents with age digital divide are ten years older than rural residents.According to the head of the household registration,the influence of digital finance on the consumption of urban immigrants(urban agricultural account)is slightly greater than that of urban residents(urban non-agricultural account).In addition,the study also found that the promotion effect of digital finance development on the consumption level of urban and rural households is also affected by the number of residents' real estate,the nature of housing and the education level of the head of the household.The innovations studied in this article may include the following aspects:First,the theoretical mechanism innovation,which comprehensively and systematically analyzes the theoretical mechanism that the development of digital finance affects the level of consumer consumption and promotes the upgrading of the consumer structure.On the consumer demand side,based on the traditional consumption theory,the paper introduces concepts such as the prospect theory,psychological account and behavioral life cycle model in behavioral economics to better explain how digital finance influences the consumption and consumption structure of residents by influencing the individual behavior of consumers.At the same time,from the product supply side,it analyzes how the development of digital finance affects the level of entrepreneurship and innovation in the region,thereby increasing the effective supply of products to promote residents' consumption and the upgrading of consumption structure.Second,the research content is innovative,under the background of China's urban-rural dual economic structure,this paper innovatively combined with the influence mechanism to analyze the reasons why the digital finance has different impacts on urban household consumption and rural household consumption.The digital finance promotes the consumption of urban households by raising people's income,reducing the uncertainty and optimizing payment environment,and promotes the consumption of rural households by alleviating liquidity constraints,reducing the uncertainty and optimizing payment environment.It has a greater impact on urban households in reducing income uncertainty,and it has a greater impact on rural residents in optimizing payment environment.Finally,combining the characteristics of the head of the household and the characteristics of the household,the heterogeneity of the impact of the development of digital finance on household consumption is analyzed.Third,the research method is innovative,in the empirical analysis,a variety of estimation methods are used for robustness testing,such as core explanatory variables lag one period,instrumental variable regression,and replacement of explained variables.In particular,on the selection of instrumental variables,it is not only adopted infrastructure variables such as the Internet penetration rate that matched the development of digital finance,but also innovatively used the 1983 post and telecommunications historical data to multiply the current Internet penetration rate to x construct the instrumental variables of digital finance.The empirical results confirm that the above method is effective.