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Digital credit and investment in risky financial assets: Evidence from rural China

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  • Chen, Xiaojie
  • He, Guangwen

Abstract

This paper examines the impact of digital credit utilization on rural households’ investment in risky financial assets in rural China. Employing data from the China Rural Inclusive Finance Survey administered in July 2023, our empirical results indicate that digital credit exerts a positive effect on rural households’ probability of investing in risky financial assets. Specifically, rural households that utilize digital credit have a 15.6 % higher likelihood of investing in risky financial assets compared to those that do not. Furthermore, digital credit influences this investment behavior through income growth and enhanced risk appetite. Finally, the positive impact of digital credit on risky financial asset investment is more pronounced for three subgroups: rural households excluded from traditional bank credit, male-headed rural households, and high-income rural households.

Suggested Citation

  • Chen, Xiaojie & He, Guangwen, 2025. "Digital credit and investment in risky financial assets: Evidence from rural China," Finance Research Letters, Elsevier, vol. 86(PF).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pf:s1544612325021117
    DOI: 10.1016/j.frl.2025.108858
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    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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