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Digital finance, consumer convenience, and rural residents’ consumption

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  • Chen, Wei
  • Li, Jiawei

Abstract

Using data from the China Household Finance Survey and a two-way–fixed-effects model, this study explores the impact of digital finance on farmers’ average propensity to consume and analyzes the potential risks related to excessive consumption. Results indicate that digital finance significantly enhances farmers’ average propensity to consume, facilitating and increasing rural consumption demand. However, digital finance may lead to excessive debt, increasing the potential risks of excessive consumption among farmers. Further analysis reveals that financial literacy plays a moderating role in the influence of digital finance on farmers’ consumption propensity. Farmers with lower financial literacy are more susceptible to the promotional effects of digital finance, which may increase the risk of excessive consumption and disproportionate debt. Furthermore, this study offers some policy recommendations for the promotion of digital finance in rural areas.

Suggested Citation

  • Chen, Wei & Li, Jiawei, 2025. "Digital finance, consumer convenience, and rural residents’ consumption," Finance Research Letters, Elsevier, vol. 82(C).
    • Handle: RePEc:eee:finlet:v:82:y:2025:i:c:s1544612325009080
    DOI: 10.1016/j.frl.2025.107649
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