The Impact Of Digital Inclusive Finance On Urban-rural And Internal Income Gap

Past studies have found that financial development is beneficial to income growth,but the imbalance and inadequacy of financial development are becoming increasingly serious nowadays,which makes income distribution unbalanced.Digital inclusive finance uses the Internet technology,equal to provide financial services for the public.Wide information coverage and low transaction costs is the characteristics of internet technology,so digital inclusive finance is expected to achieve equal opportunities in financial services,and thus promote the balance of income distribution.In order to study the inclusion of digital inclusive finance,this paper compares the different impacts of digital inclusive finance on urban and rural household income.This paper uses data from the China Family Panel Studies(CFPS)to match data from the Peking University Digital Financial Inclusion Index of China(PKU-DFIIC).The data of CFPS in the last three years were selected to form the panel,and bidirectional fixed effect is adopted and clustering robust standard error is introduced.By using panel data regression,it is concluded that Digital inclusive finance has significantly promoted the growth of rural household income,but has no significant impact on urban household income,indicating that digital inclusive finance has narrowed income gap between rural and urban.Thus,digital inclusive finance is inclusive.From the perspective of urban and rural areas,digital inclusive finance mainly benefits rural families with high income,but not low-income families.It indicates that digital inclusive finance has widened the income gap within rural areas to some extent.This paper argues that there is a "digital divide" and "knowledge gap" in rural areas,and therefore there is "tool exclusion" in the use of digital financial instruments,which leads to the insignificant effect of digital inclusive finance on rural low-income families.The existence of "digital divide" is tested by grouping rural households into groups whether members of family use mobile phones or not and whether adults are educated or not.In this paper,the robustness test is carried out by using the data of China Household Finance Survey(CHFS).The same panel data of the last three years are selected for the same processing.And it also confirms the robustness of the main conclusions.And it also confirms the robustness of the main conclusions.Therefore,Digital inclusive finance helps narrow the income gap between urban and rural areas.But attention should be paid to the problem of "digital divide" in the development process of digital inclusive finance,which is conducive to the poverty reduction effect of digital inclusive finance.