The Impact of Digital Inclusive Finance on Household Consumption: Empirical Analysis Based on the Yangtze River Economic Belt

Abstract

Improving residents' consumption level is one of the important goals of China's economic development, and digital inclusive finance, as the key work of financial development, has a non-negligible impact on residents' consumption. Based on the panel data of 11 provinces and cities in the Yangtze River Economic Belt from 2016 to 2022, this paper empirically analyzes the relationship between digital financial inclusion and household consumption by using the fixed-effect model and considering the endogenous problem. The findings are as follows: First, digital inclusive finance promotes the improvement of residents' consumption level, and this result is robust; Second, the mechanism analysis results show that digital inclusive finance can improve residents' consumption level through increasing residents' income, digital insurance and consumer credit. Thirdly, from the perspective of regional and urban-rural heterogeneity analysis, it is found that the promoting effect of digital inclusive finance on residents' consumption is more obvious in the middle reaches of the Yangtze River Economic Belt, while the promoting effect of digital inclusive finance on rural residents' consumption is more significant. Based on this, relevant policy recommendations are put forward, and the Yangtze River Economic Belt region should improve the relevant policies and regulations of digital inclusive finance, driving progress in the digital insurance industry, promote financial technology innovation and differentiated development of digital inclusive finance.