Digital inclusive finance and resilient livelihoods: Lessons from China’s Rural Revitalization Strategy

The rapid growth of digital inclusive finance (DIF) has emerged as a pivotal driver of China’s Rural Revitalization Strategy, extending the outcomes of poverty alleviation toward building more resilient and sustainable rural livelihoods. This study investigates the impact mechanisms through which DIF influences farmers’ livelihood resilience (FLR) in China, using panel data from the China Family Panel Survey (CFPS) between 2014 and 2022. A composite index of FLR is constructed using an entropy-based method, while DIF is disaggregated into three dimensions: Coverage Breadth (CB), Usage Depth (UD), and Digitization Level (DL). To assess both causal effects and feature importance, this work employs a two-way fixed-effects regression model in conjunction with XGBoost-SHAP machine learning technique. The findings reveal a steady improvement in FLR over the study period, although regional disparities in resilience are inversely related to the extent of DF penetration. Among the DIF dimensions, CB has the most substantial and consistent positive impact on FLR, whereas UD and DL show more limited effects. Heterogeneity analysis further indicates that the resilience-enhancing effects of DIF are more significant for self-employed farmers and those who rely on cultivated land. Spatially, DIF has a more significant impact in disaster-prone areas, particularly in eastern China, compared to mountainous regions. These results highlight the importance of expanding targeted DIF initiatives to address spatial and structural inequalities, offering valuable insights for policymakers aiming to strengthen FLR within the broader context of China’s Rural Revitalization Strategy.