Research On The Impact Of Digital Inclusive Finance Development On China's Urban-rural Income Gap

How to improve the gradually increased income gap is an important livelihood issue that every economy has to face.Income inequality remains a stubborn challenge in China despite the rapid economic growth since the implementation of the reform and opening up policy,which will have a negative impact on China's sustainable economic growth and social stability.Among the factors affecting the income gap,the role of financial development cannot be ignored.Many scholars at home and abroad have studied income distribution from the perspective of financial development,but have not yet reached a consensus conclusionDue to the urban-rural dual economic structure and the financial development policies that focus on efficiency and contempt for fairness,many financial consumers in rural areas have been excluded from traditional finance.As an emerging concept of financial development,digital inclusive finance aims to use digital technology to allow financial services to be extended to the broadest "unbanked" sectors of society in an affordable and sustainable way so that they can improve their living standards.Recently,China's digital inclusive finance system has achieved tremendous development,while the urban-rural income gap has also shown a decreasing trend.It is clear that understanding the impact of digital financial inclusion development on income inequality can promote a further exploration of inclusive finance at the theoretical level.At the same time,it has certain practical significances for the implementation of China's rural revitalization strategy and the establishment of a comprehensive well-off societyAfter reviewing the existing literature research,this thesis describes the trend of digital inclusive financial development and the urban-rural income gap in China.It adopts the research method combining theoretical analysis and empirical analysis,extends the existing literature on the relationship between financial development and income gap by innovatively focusing on digital financial inclusion.In the theoretical analysis section,this thesis summarizes the impact mechanism of digital inclusive financial development on the urban-rural income gap and then presents several research hypothesis,which is reducing the service threshold effect of traditional financial development,alleviating the unbalanced development effect of traditional financial system and utilizing the trickle-down effect of economic growth.In the empirical analysis section,this paper uses the panel data of 31 provincial administrative regions in mainland China from 2013 to 2017 to study the impact of digital inclusive financial development on the income gap between urban and rural areas,From the regression results we can draw the following four conclusions.Firstly,the benchmark analysis finds that the development of digital inclusive finance can significantly reduce the urban-rural income gap.In addition,there is no evidence showing the existence of Kuznets curve between digital financial inclusion and income inequality.Secondly,the regional heterogeneity analysis shows that the development of digital inclusive finance has the greatest effect on the reduction of the income gap in the western region,followed by the central region and the smallest in the eastern region.Thirdly,the impact of digital inclusive financial development on the income gap has a double threshold effect,which means only when the level of economic development is maintained in a reasonable range,can the development of digital inclusive finance significantly reduce the income gap.Finally,the result of the spatial econometric model shows that the development of digital inclusive finance can significantly decrease the urban-rural income gap within the province but intensifies the income inequality in neighboring provinces.The above research conclusions have certain value for China's implementation of rural revitalization strategy and the promotion of urban-rural integration development.At last,this thesis proposes some policy recommendations to promote the development of digital inclusive finance system and reduce the urban-rural income gap,including improving the top-level design of digital inclusive financial system,strengthening the construction of the digital inclusive financial infrastructure and increasing the propaganda of financial knowledge popularization education.