Role of digital economy and technology adoption for financial inclusion in India

Purpose - The study aims to explore the role of digital economy and technology adoption for financial inclusion in the Indian context. Design/methodology/approach - A conceptual framework was developed and hypotheses were tested through a survey conducted on 433 educated adults (males and females) residing in different districts of Rajasthan (India). Data was collected through a structured questionnaire and was subjected to confirmatory factor analysis. Structural equation modeling (second-order) was used to validate the measurement model and to test the mediating effect. Findings - The measurement model is a confirmatory factor analysis and measures the reliability of the observed variables in relation to the latent constructs and indices shows the overall model fit. Structural model results indicate a complete mediation and a reflective impact (R2= 0.28) of the extended technology acceptance model on digital economy and financial inclusion relationship. Research limitations/implications - The study has taken into account only the perception of educated adults residing more specifically in one geographical area of a country. Thus, it limits the generalization of results in terms of implications to other regions and countries. Practical implications - The proposed framework and implications are quite significant for policymakers and service providers to understand the nexus and strategic choices involved in this area. Moreover, understanding of user’s frame dependence would help in the development of digital assistive models that would perhaps mitigate the gap from participation (digital economy) to acceptance (financial inclusion). Originality/value - Present study proposed a three-dimensional hypothetical model and conceptualized the digital economy (independent variable) as participation, behavioral intentions measured through the extended technology acceptance model (mediating variable) as adoption and financial inclusion (dependent variable) as acceptance to better understand the nexus. It represents the foremost step and a unique effort in this area. Moreover, the study was empirical and has wider applications both from the perspectives of end-users and service providers.