The Impact Of Fintech On Household Consumption Structure In China

Fintech can affect household consumption by improving facilitation of payment and lending.However,we must be vigilant about the expansion of residents' liabilities by such facilitation and this will certainly threaten macroeconomic crisis in China.The development of Fintech has greatly affected the industry upgrading and household consumption in China.However,if household leverage ratio is increasing,it will be more likely to cause the outbreak of debt crisis than that of enterprise leverage ratio(Economic Analysis and Forecasting Group,2018),and from the difficulty of risk disposal,once the crisis breaks out,family debt with unlimited liability characteristics is more difficult to deal with than limited liability corporate debt and no liability government debt.Most literatures focused on the impact of fintech on macroeconomic development and regional inequality(Yi and Zhou,2018),and few discussed the relationship between Fintech and household consumption in China.Therefore,it is necessary to discuss the mechanism of Fintech' impact on household consumption structure.On the one hand,Chinese Fintech is still in initial stage,and the publish are still concentrated in the traditional financial field;on the other hand,the disclosure period of Finctech development indicators,including Internet financial development index,digital inclusive financial index,Internet Financial sentiment index and so on,is relatively short,and the adoption rate is still low,especially limited by the disclosure of indicators.For matching constraints between the situation and family data,the existing research mainly uses the macro-data with large cross-section in a single year.Therefore,based on data from Peking University's Internet Financial Development Index and China Family Panel Studies(CFPS),this paper aims to clarify the effect of Fintech on household consumption structure in China.Further,we investigate the mechanism behind it and explore whether there is significant leverage convenience for Chinese residents.In this way,we can form an accurate judgment on the effectiveness of the development of Fintech in China and strengthen the effective supervision of the formation of Internet finance,reducing the leverage caused by residents.Finally,we can provide scientific and effective theoretical support and policy recommendations for macroeconomic crisis risk.The conclusions of this paper are as follows: Firstly,after controlling the fixed effect between provinces,the impact of Fintech on household consumption expenditure level is significantly negative,which seems contrary to common sense.This paper further examines the impact of this phenomenon and its internal mechanism;secondly,based on further research on consumption classification,this paper finds that interconnection after considering the fixed effect between provinces.The development of Internet finance has a significant effect on survival consumption(mainly clothing consumption),while there is a significant extrusion effect on enjoyment consumption(mainly household equipment and daily necessities)and development consumption(mainly medical and health products consumption and other consumption expenditures).Thirdly,the internal mechanism for this phenomenon is studied.Research shows that the development of Internet finance can indeed promote current consumption by increasing liquidity and payment facilities(Yi and Zhou,2018),but this promotion effect can only be reflected in the subsistence consumption expenditure items.On the other hand,the development of Internet finance will squeeze residents' enjoyable and developmental consumption by facilitating lending and increasing residents' liabilities.All in all,household consumption was significantly negative affected by Fintech.