Research on World Agricultural Economy

Impact of Digital Inclusive Finance on the High‑Quality Development of Rural Economy: Evidence from China

Lu Zhang

School of Accounting and Finance, Anhui Xinhua University, Hefei 230094, China

S. M. Ferdous Azam

Postgraduate Centre, Management & Science University, Shah Alam 40100, Malaysia

Jacquline Tham

Postgraduate Centre, Management & Science University, Shah Alam 40100, Malaysia

DOI: https://doi.org/10.36956/rwae.v6i2.1630

Received: 26 December 2024 | Revised: 22 January 2025 | Accepted: 10 February 2025 | Published Online: 7 April 2025

---

Abstract

Motivated by the need to promote high-quality economic development in rural China, this study examines the impact of Digital Inclusive Finance (DIF) on rural economic development. The problem statement highlights that while rural revitalization is a key priority for the Chinese government, issues related to agriculture, rural areas, and farmers remain challenging. DIF, with its advantages of low threshold, high efficiency, and low cost, emerges as a potential solution to facilitate rural economic growth. The approach adopted in this study involves using panel datasets covering 31 provinces in China from 2011 to 2022. The study employs empirical analysis to examine the relationship between DIF and rural economic development. Specifically, it investigates how DIF contributes to innovation, coordination, green development, openness, and shared prosperity in rural areas. The data used in this study includes various indicators related to rural economic development, such as fiscal expenditure, rural human capital, social security, per capita GDP, and the urban-rural income gap. Additionally, the Peking University DIF Index, which includes coverage breadth index, usage depth index, and digitalization degree index, is used as a proxy variable for DIF. The results indicate that DIF has a significant positive impact on the high-quality development of rural economy in China. The benchmark regression results show that DIF exerts a promoting effect on rural economic development, even after controlling for various factors. Furthermore, the study finds that the impact of DIF varies across different regions, with significant positive effects observed in the eastern, central, and western regions.

Keywords: Rural Economic Development; Financial Services; Digital Infrastructure; China

---

References

[1] Tan, X., Zhang, Z., 2025. Digital inclusive finance and rural residents' sense of social equity. Journal of Huazhong Agricultural University. 25(1), 94–107.

[2] Ge, H., Li, B., Tang, D., et al., 2022. Research on Digital Inclusive Finance promoting the integration of rural three-industry. International Journal of Environmental Research and Public Health. 19(6), 3363.

[3] Li, W., Fan, J., Zhao, J., 2024. A Study on the Impact of Digital Inclusive Financial Development on the welfare differences between urban and rural residents. Journal of the Knowledge Economy. 15(2), 9001–9028.

[4] Li Yi., 2024. Digital Financial Inclusion and Common Prosperity: Friends of Accounting. 24(4), 27–35.

[5] Liu, Y., Luan, L., Wu, W., et al., 2021. Can digital financial inclusion promote China's economic growth? International Review of Financial Analysis. 78, 101889.

[6] Chen, L., Zhang, H., Xie, J., 2024. Digital Inclusive Finance and Innovation of Private Enterprises. Finance and Trade Research. 24(05), 101–110.

[7] Dong, B., Wu, T., 2024. The impact of digital inclusive finance on excessive debt of enterprises. XIAMEN UNIVERSITY. 24(05), 108–121.

[8] Ren, B., Liu, J., 2021. Development of Digital Inclusive Finance and Improvement of Regional Innovation Level: Analysis from the Perspectives of Internal Supply and External Demand. Journal of Southwest University for Nationalities (Humanities and Social Sciences Edition). 21(2), 99–111. (in Chinese)

[9] Jia, H., Nie, P., 2022. Research on the Impact of Digital Inclusive Finance on Regional Economic Development: Analysis Based on Mediation Effect Test. Journal of Jilin University of Commerce. 22(05), 5–11.

[10] Zhang, D., Wang, F., He, Z., 2022. The DIF, urban-rural insurance, and coordinated urban-rural development: empirical evidence based on the Yangtze River Economic Belt. Statistics and Decision Making. 38(5), 142–145. (In Chinese)

[11] Huang, X., 2021. An Empirical Test of the Driving Force of Digital Financial Inclusion on Urban Innovation Capability. Technoeconomics & Management Research. 2021(11), 41–46.

[12] Zhou, L., Chen, Y., 2022. Digital inclusive finance and urban-rural income gap: theoretical mechanism, empirical evidence, and policy choices. World Economy Study. 22(05), 117–134.

[13] Wu, Q., Yao, L., 2023. Digital Economy,Innovation-Driven and Regional Economic Growth. Soft Science. 23(06), 63–70.

[14] He, H., Feng, M., 2023. Study on the Nonlinear Impact of Digital Inclusive Finance on the Development of Green Agriculture. Journal of Lanzhou University of Finance and Economics. 23(2), 25–35.

[15] Zhong, T., Huang, Y., Sun, F., 2022. Digital Inclusive Finance and Green Technology Innovation:Dividend or Gap. Financial Economics Research. 22(03), 131–145.

[16] Hui, X., 2021. Digital inclusive finance and urban green total factor productivity: intrinsic mechanisms and empirical evidence. Southern Finance. 21(05), 20–31.

[17] Wang, N., Zhang, K., Zhang, L., 2023. Digital inclusive finance and high-quality economic development: empirical evidence from 251 prefecture level cities. Wuhan Finance. 23(07), 61–70.

[18] Yang, S., Lei, X., 2024. Digital inclusive finance and common prosperity for rural residents: impact effects and mechanisms. Statistics and Information Forum. 24(02), 56–68.

[19] He, Z., Ma, J., 2024. The impact of digital inclusive finance driving high-quality integration of rural industries: indicator construction and mechanism testing. Research on Financial Development. 24(3), 76–82.

[20] Xu, T., Yang, G., Chen, T., 2024. The role of green finance and digital inclusive finance in promoting economic sustainable development: A perspective from new quality productivity. Journal of Environmental Management. 370, 122892.

[21] Zhang, Y., Hu, S., 2023. Research on the Impact of Digital Inclusive Finance on the Coordinated Development of Economy and Environment. Soft Science. 23(09), 23–30.

[22] Wang, B., Sheng, S., Shang, H., 2024. Research on the Relationship between Digital Inclusive Finance and Traditional Rural Finance. Jiangsu Agricultural Sciences. 24(15), 262–270.

[23] Tian, L., Guo, M., 2024. Research on the Development of Digital Inclusive Finance to Alleviate Financing Constraints. Journal of Chongqing University. 24(03), 70–85.

[24] He, J., Ma, L., 2024. Research on Digital Inclusive Finance Promoting Common Prosperity. Journal of Credit investigation. 24(09), 71–82.

[25] Sun, L., Zhu, C., 2022. Impact of Digital Inclusive Finance on Rural High-Quality Development: Evidence from China. Discrete Dynamics in Nature and Society. 2022(1), 7939103.

[26] Feng, J., Wang, Y., 2024. Does digital inclusive finance promote agricultural development? A test based on threshold and spillover effects, Finance Research Letters. 69(Pt A), 106104.

[27] Feng, M., 2024. Digital inclusive finance, rural entrepreneurship, and increasing farmers' income. Statistics and Decision making. 24(07), 138–143.

[28] Zhu, Y., 2022. Research on the Impact of Digital Inclusive Finance on High-Quality Economic Development. Frontiers in Business, Economics and Management. 4(3), 38–43.

[29] Arabatzis, G., Andreopoulou, Z., Koutroumanidis, T., et al., 2010. E-Government for rural regional development in Greece: Classifying and ranking content characteristics of Development Agencies Websites. Journal of Environmental Protection and Ecology. 11(3), 1138–1149.

[30] Andrea, V., Tsantopoulos, G., Tampakis, S., et al., 2013. Involving local people in sustainable rural development and conservation: a response to the economic crisis. International Journal of Green Economics. 7(4), 374–389.

[31] Xia, X., Chen, Z., Zhang, H., et al., 2019. Agricultural development: digital technological empowerment and implementation path. China Rural Economy. (12), 2–15. (in Chinese)

[32] Li, M., Yu, Y., 2024. Can digital inclusive finance affect rural education. Education and Economy. 24(04), 23–34.

[33] Bai, Q., Ding, Z., 1998. On the Sustainable Development of Finance. Studies of International Finance. (05), 28–32.

[34] Leyshon, A., Thrift, N., 1993. The restructuring of the U.K. financial services industry in the 1990s: a reversal of fortune? Journal of Rural Studies. 9(03), 223–241.