Research On How The Development Of Digital Inclusive Financial Technology Influence The Participation Of Households In Financial Markets

Since China's ageing population issue becomes more serious,the demand for financial services from micro-households is also increasing.People are no longer satisfied with the 2%savings rate return of banks,but need more diversified financial products to increase asset income.Using the DID empirical strategy based on the quasi-experiment of nation-wide development of the digital inclusive finance in 2013,this paper examines how the development of digital inclusive financial technology influence the participation of micro-households in financial markets,choosing stocks,bonds,and other financial products from a micro perspective.Empirical results show that:in areas that have been more affected by the development of digital inclusive financial technology,compared with the years before digital financial technology development,micro-households are increasingly willing to participate in financial markets and choose broad-based fund allocation such as stocks and bonds.In addition,we also find that the positive effects brought by digital inclusive financial technology gradually increase over time,and the long-term dynamic impact is more significant.By using different models and sample heterogeneity analysis,we all verified the robustness of the results and reached similar conclusions.Through heterogeneity analysis,we also found that if we want to achieve the balance of financial resources in different regions in the future,and encourage people to enter the financial market for asset allocation to improve the welfare of micro-households,we must also increase inclusive financial education and human capital accumulation.The internal mechanism studied in this article is that the development of digital inclusive financial technology has largely changed the status of people's inadequate financial services provided by traditional financial institutions and low financial accessibility,and this technology has a strong exogenous nature.The development of digital inclusive financial technology has not only caused a change in the willingness of micro households to participate in the selection of related financial products in the financial market before and after the development,but also has different impacts on micro households in areas with different levels of digital inclusive financial development.This thesis has the following characteristics and contributions.First,in the selection of research objects,the research objects are focused on micro-households.We used data from the China Family Panel Survey(CFPS)from 2010 to 2018,covering more than 16,000 micro-households in 162 counties in 25 provinces,municipalities or autonomous regions across the country.We examined digital inclusive financial technology at a more micro-level.The impact of development on micro-households provides more solid evidence.Secondly,in terms of research methods,this paper uses the impact of digital inclusive financial technology in 2013 as a quasi-natural experiment,and adopts a DID empirical strategy to identify causality instead of correlation,which overcomes the endogenous problem better.Third,the research findings in this paper also provide a new perspective to explain the low participation of the Chinese household in financial markets,fully identifying the causal effect of the development of digital inclusive finance.The research in this article also has the following implications.First,we have also empirically found that the willingness of micro-households to participate in the financial market is also dynamically increasing.If it can help micro-households to improve their investment returns,it can also motivate the development of China's capital market and increase the proportion of direct financing in financial transactions.Second,traditional financial institutions cannot meet people's needs for financial services.There is a phenomenon of "twenty percent and eighty percent law" in traditional financial industry.The development of inclusive finance is often regarded as a political task.Its development is slow and has little effect It is often heard that SME financing is difficult and expensive.The demand side and the supply side of the capital have not been able to match well.The cause is that China's current economic growth model is changing,but traditional financial institutions are not.It has not followed the transformation of the economic model.From our empirical results,the overall development level of inclusive finance in the central and eastern regions is much higher than that in the west and northeast,and the level of inclusive finance in urban areas is higher than that in rural areas.There are also many people complaining that China's finance does not support the real economy.This requires the power of digital inclusive finance.The development of digital inclusive finance has begun to force the transformation of traditional financial institutions and gradually improve the nation's financial infrastructure.Cities with high population densities are expanding to rural areas with low incomes and low population densities,which will accelerate the further balance of financial resources.Fourth,from the empirical results of this article,low human capital is still a disadvantage that restricts the further development of inclusive finance.Compared with high human capital groups,the willingness of low human capital groups to participate in financial markets to obtain financial services still needs to be improved.At the same time,with the impact of digital financial technology,in order to prevent low-human capital micro-households from blindly choosing financial products that do not match their own risk-bearing capacity,especially the elderly,corresponding financial education programs should be gradually launched to let more people share the dividends of digital inclusive financial development.