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Digital Financial Inclusion and Diversity of Household Financial Asset Allocation: Evidence From China

Author

Listed:
  • Tingfeng Jiang
  • Wen Li
  • Wenjie Sun
  • Zunhui Yang

Abstract

Using panel data from the China Household Finance Survey (CHFS) and the Digital Financial Inclusion Index (DFII) of Peking University, this paper investigates the impacts of DFI development on household financial asset allocation. The results show that DFI development significantly increases the diversity of household financial assets and enhances the breadth and depth of household participation in the investment of stocks, funds, and internet finance products. These effects remain robust to various tests, including the use of instrumental variables, reconstructing the dependent variable, and adopting different regression models. Specifically, DFI increases household asset diversity through two main channels: improving financial literacy and alleviating liquidity constraints. Additionally, the heterogeneity analyses indicate that the promotive effect of DFI is stronger for households with younger heads, higher risk aversion, and greater income uncertainty or those located in rural areas. This research underscores the importance of digital financial inclusion in fostering a more diverse asset allocation landscape in China, with potential implications for other economies as well.

Suggested Citation

  • Tingfeng Jiang & Wen Li & Wenjie Sun & Zunhui Yang, 2025. "Digital Financial Inclusion and Diversity of Household Financial Asset Allocation: Evidence From China," Australian Economic Papers, Wiley Blackwell, vol. 64(2), pages 205-220, June.
    • Handle: RePEc:bla:ausecp:v:64:y:2025:i:2:p:205-220
    DOI: 10.1111/1467-8454.12382
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    References listed on IDEAS

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    1. Chai, Shijun & Chen, Yang & Lim, King Yoong, 2026. "Digital divide and household portfolio investment efficiency: Evidence from China," Emerging Markets Review, Elsevier, vol. 70(C).

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