An Empirical Study On Digital Inclusive Finance To Narrow The Urban-rural Income Gap

The existence of externality makes the traditional inclusive finance "hot outside and cold inside",and the market supply of traditional inclusive finance is far less than the market demand,thus facing the market failure.The use of digital technology greatly reduces the marginal cost of financial services,improves the sustainability of inclusive financial services,and thus alleviates the market failure problems faced by traditional inclusive financial services.The urban-rural dual economic structure and the urban-rural income gap are the long-term problems and challenges in China's economic development.Among many ways to solve the urban-rural income gap,financial poverty alleviation is one of the important ways.Therefore,it is of great theoretical and practical significance to study the effect of digital inclusive finance on narrowing the urban-rural income gap.This paper firstly summarizes the development of digital inclusive finance,analyzes the background and main business of the development of digital inclusive finance in China,and summarizes the existing digital financial means and paths.At the same time,it also combs the characteristics of digital inclusive finance and analyzes the regional differences in the development of digital inclusive finance in China.Then it makes a theoretical analysis on the influence mechanism of digital inclusive finance on poverty reduction and income increase,and points out that digital inclusive finance alleviates the market failure of traditional inclusive finance through poverty reduction effect,mitigation and exclusion effect and threshold reduction effect,and thus plays a role in narrowing the urban-rural income gap.Finally,by collecting China's provincial panel data from 2011 to 2018,we conducted an empirical test to narrow the urban-rural income gap in digital financial inclusion development.First,we conducted an empirical test to the overall situation,and then we conducted an empirical test to give play to the poverty reduction effect,mitigation and exclusion effect,and threshold reduction effect.The results show that:(1)the coefficient of the total index of digital financial inclusion is-0.0203,which is significant at the 1% level,indicating that under the condition of other fixed conditions,the urban-rural income gap decreases by 0.0203 units for every unit increase of the total index of digital financial inclusion,indicating that the development of digital financial inclusion in China has a significant impact on narrowing the urban-rural income gap.(2)in terms of the three impact mechanisms of narrowing the urban-rural income gap,the most significant one is the threshold effect of digital financial inclusion,followed by the poverty reduction effect,and finally the coverage and depth of use.Based on the research results,this paper puts forward several Suggestions :(1)financial institutions should develop digital financial inclusion development strategies;(2)increase support for rural electronic information technology;(3)to promote rural residents' understanding of digital financial inclusion.