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Digital economy in rural areas and credit costs: mediating role of financial inclusion

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  • Wang, Wei
  • Bai, Xiaoyu

Abstract

Limited access to affordable credit has long hindered rural household income growth. Amid rapid digital economy expansion, this study explores its impact on rural credit costs. Using data from a large-scale household survey in China, we find strong evidence that the digital economy reduces borrowing costs. We also identify financial inclusion as a key channel through which digitalization lowers credit expenses. These results remain robust after addressing sensitivity and endogeneity concerns. Overall, this study enriches the literature on the digital economy.

Suggested Citation

  • Wang, Wei & Bai, Xiaoyu, 2025. "Digital economy in rural areas and credit costs: mediating role of financial inclusion," Finance Research Letters, Elsevier, vol. 86(PB).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pb:s1544612325017155
    DOI: 10.1016/j.frl.2025.108461
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    References listed on IDEAS

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