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Does digital inclusive finance promote innovation? Evidence from China

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  • Liu, Xinran
  • Si, Deng-Kui

Abstract

The deep integration of inclusive finance with digital technologies emerges as a crucial force for bridging service gaps, expanding financial access to underserved populations, and fostering sustainable economic growth. This paper utilizes the data from 270 cities in China spanning 2011 to 2022 to investigate the impacts of digital inclusive financial development on technological innovation. The results show that digital inclusive finance significantly promotes technological innovation, mainly driven by enhancing credit availability, improving resource allocation efficiency, and optimizing the consumption structure. The heterogeneity results reveal that this effect is pronounced in cities characterized by advanced marketization, high internet penetration, high human capital, and strong intellectual property protection. This paper contributes to facilitating coordinated urban development and provides practical significance for accelerating the digital convergence of metropolitan production networks.

Suggested Citation

  • Liu, Xinran & Si, Deng-Kui, 2025. "Does digital inclusive finance promote innovation? Evidence from China," Economic Modelling, Elsevier, vol. 152(C).
    • Handle: RePEc:eee:ecmode:v:152:y:2025:i:c:s026499932500286x
    DOI: 10.1016/j.econmod.2025.107291
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    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • O35 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Social Innovation

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