Research On The Impact Of China’s Digital Financial Inclusion Development On Urban-rural Income Gap

Common prosperity is the essential requirement of socialism with Chinese characteristics,and to achieve common prosperity,it is necessary to improve the income distribution system.At present,China’s urban and rural income distribution is unreasonable,and the problem of excessive urban-rural income gap still exists.In the financial field,digital inclusive finance integrates the advantages of digital technology and inclusive finance,gives full play to the inclusive characteristics of low cost and low threshold,can well alleviate the financial exclusion of rural groups,promote the rational allocation of urban and rural financial resources,and then help narrow the income gap between urban and rural areas.On the other hand,because the financial literacy of rural groups is generally lower than that of urban groups,digital technology upgrading may also create a digital divide and bring about digital exclusion.So,will the development of digital financial inclusion widen the income gap between urban and rural areas,or narrow the income gap between urban and rural areas? What is the mechanism of influence here?In order to explore the above problems,this paper first combs the literature to fully understand the research situation in this field,and then analyzes the influence mechanism based on the theories of financial development and dual economic structure,and puts forward the research hypothesis of this paper.Then,the development status of digital inclusive finance and the current situation of urban-rural income gap in China were analyzed: the Peking University Digital Finance Index was selected to analyze the development of digital inclusive finance;The urban-rural income ratio and Thiel index were used to analyze the current situation of urbanrural income gap at the national and provincial levels.In the empirical part,using the short panel data of 30 provinces in China from 2011 to 2020,the relationship between the two was empirically tested through the individual fixed-effect model,and dimensional heterogeneity analysis was made based on the sub-items of the core explanatory variables.Compared with linear analysis,the nonlinear relationship between the two has been relatively lacking in previous studies,so this paper further studies the nonlinear relationship between the two through the threshold model,and innovatively selects urbanization as the threshold variable.In order to put forward the directional opinions on the development of digital inclusive finance to maximize and converge the urban-rural income gap,this paper analyzes the nonlinear relationship between urban and rural income gap in each sub-dimension,and analyzes the threshold model of the three sub-dimensions and the urban-rural income gap respectively.It can be seen from the empirical results that the development of digital inclusive finance will significantly narrow the income gap between urban and rural areas,and its internal subdimensions also show a significant convergence effect,and in the order of convergence intensity,it is the breadth of coverage,depth of use,and degree of digitalization.The results of nonlinear research show that the development of digital inclusive finance has a significant doublethreshold convergence effect on the income gap between urban and rural areas in China,and the convergence intensity increases significantly with the increase of urbanization level.Furthermore,from the sub-dimensional level,the threshold characteristics of coverage breadth and use depth are consistent with the total index,and when the threshold range is from low to high,the coverage breadth in convergence intensity is greater than the use depth.There is also a significant double-threshold effect in the degree of digitalization,and when the threshold range is from low to high,the income gap between urban and rural areas is first narrowed and then expanded,showing the characteristics of "U" shaped threshold.In order to better narrow the income gap between urban and rural areas through the use of digital inclusive financial tools,based on the research conclusions,combined with the analysis of the current situation in China in the third part,this paper argues that the breadth and depth of digital inclusive finance should be further improved in the future,and the urban-rural income gap should be dynamically narrowed in combination with the urbanization level stage of each province.At the same time,the whole country should also play a good "game of chess",make up for shortcomings,and focus on promoting the construction of digital inclusive finance in low-level provinces.Based on the analysis theory of demand-side financial exclusion mechanism and the hollowing out of rural talents caused by urbanization development in China,this paper believes that in the future,we should also focus on improving the financial literacy of farmers,further improving the ability of farmers to use digital technology,reducing their digital exclusion,and alleviating the digital divide,in order to further narrow the income gap between urban and rural areas in China.