IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v92y2026ics1544612326001030.html

The impact of digital inclusive finance on urban-rural income gap

Author

Listed:
  • Yang, Mei
  • Sun, Haolun

Abstract

Drawing on 2011 2023 panel data from multiple Chinese provinces, this study empirically tests the impact of digital inclusive finance (DIF) on the urban-rural income gap (URIG) through the lens of agricultural productive services (APS). The findings indicate that DIF well reduces URIG, though such effect varies across regions and DIF dimensions. Further analysis reveals that DIF narrows income gaps primarily by expanding rural credit access and improving agricultural productivity. Moreover, DIF exhibits notable spatial spillover effects, reducing income inequality within local areas alongside promoting positive externalities in neighboring regions. Consequently, it is essential to boost the localized implementation of high-quality DIF initiatives, leverage spatial spillover effects to foster coordinated regional development, actively bridge the urban-rural digital divide, and further integrate DIF into rural economic revitalization strategies.

Suggested Citation

  • Yang, Mei & Sun, Haolun, 2026. "The impact of digital inclusive finance on urban-rural income gap," Finance Research Letters, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:finlet:v:92:y:2026:i:c:s1544612326001030
    DOI: 10.1016/j.frl.2026.109572
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612326001030
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2026.109572?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Yang Shen & Xiaoyang Guo & Xiuwu Zhang, 2023. "Digital Financial Inclusion, Land Transfer, and Agricultural Green Total Factor Productivity," Sustainability, MDPI, vol. 15(8), pages 1-25, April.
    2. Dou, Rongrong & Zhu, Bingrui & Chen, Wei & Li, Qiao & Zhang, Sun & Xu, Wenzhe, 2025. "How does townships’ economic landscape affect urban–rural income inequality in China?," Socio-Economic Planning Sciences, Elsevier, vol. 98(C).
    3. Cao, Lei & Wang, Guosong, 2024. "Impact of digital finance on agricultural output: From the perspective of digital development of agriculture," Finance Research Letters, Elsevier, vol. 66(C).
    4. Wang, Yangyang & Zhou, Liangxiao & Li, Tianqun & Feng, Chunyang, 2025. "The impact mechanism of industrial transformation and upgrading on the urban-rural income gap: An analysis based on the threshold effect of digital inclusive finance development," Finance Research Letters, Elsevier, vol. 77(C).
    5. Songyu Jiang & Jie Gao & Jing Chen & Xingqi Zhao, 2025. "How Does Digital Inclusive Finance Affect Agricultural Productive Services?—An Economic Model in the Chinese Context," Sustainability, MDPI, vol. 17(2), pages 1-19, January.
    6. Lian, Xu & Mu, Yueying & Zhang, Wenyu, 2023. "Digital inclusive financial services and rural income: Evidence from China's major grain-producing regions," Finance Research Letters, Elsevier, vol. 53(C).
    7. Huishuang Jin & Hui Liu, 2025. "The Impact of Agricultural Credit on Planting Structure: An Empirical Test of Factor Allocation," Land, MDPI, vol. 14(5), pages 1-22, May.
    8. Yan Huang & Junyan Zhao & Shi Yin, 2023. "Does digital inclusive finance promote the integration of rural industries? Based on the mediating role of financial availability and agricultural digitization," PLOS ONE, Public Library of Science, vol. 18(10), pages 1-18, October.
    9. Mikkel Barslund & Finn Tarp, 2008. "Formal and Informal Rural Credit in Four Provinces of Vietnam," Journal of Development Studies, Taylor & Francis Journals, vol. 44(4), pages 485-503, April.
    10. Liu, Yang & Luan, Lin & Wu, Weilong & Zhang, Zhiqiang & Hsu, Yen, 2021. "Can digital financial inclusion promote China's economic growth?," International Review of Financial Analysis, Elsevier, vol. 78(C).
    11. Wang, Sheng & Wu, Chao & Fu, Boyu, 2024. "The dual effects of digital inclusive finance on the urban-rural income gap: An empirical investigation in China's Yangtze River Delta region," Finance Research Letters, Elsevier, vol. 69(PA).
    12. Zhang, Cheng & Zhu, Yuyao & Zhang, Limin, 2024. "Effect of digital inclusive finance on common prosperity and the underlying mechanisms," International Review of Financial Analysis, Elsevier, vol. 91(C).
    13. Luo, Chuliang & Li, Shi & Sicular, Terry, 2020. "The long-term evolution of national income inequality and rural poverty in China," China Economic Review, Elsevier, vol. 62(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Song, Qinyue & Yan, Mingyi & Shi, Zhengxin & Han, Zhenfu, 2026. "Exploring the financial mechanisms of digital inclusion in promoting farmers’ income," Finance Research Letters, Elsevier, vol. 92(C).
    2. Yingyuan Liu & Qian Wan & Wenhui Chen, 2024. "RETRACTED ARTICLE: Digital Inclusive Finance as a Catalyst for Rural Revitalization: An Empirical Analysis from the County Development Perspective in Hubei Province," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 11548-11580, September.
    3. Chen, Zhuo & Zhang, Jialu & Liu, Xiawei, 2025. "Encouraging entrepreneurship through digital inclusive finance," Finance Research Letters, Elsevier, vol. 74(C).
    4. Fang, Ling & Shen, Ye, 2025. "Digital economy enabling high-quality development of agricultural Enterprises: Interaction, inner mechanism and strategic orientation," International Review of Economics & Finance, Elsevier, vol. 103(C).
    5. Wei, Xiaobei & Yang, Zongpu & Yan, Yongjun & Sun, Jia, 2024. "Rural E-commerce, Digital finance, and urban–rural common prosperity: A Quasi-natural Experiment Based on China's Comprehensive Demonstration of E-commerce Entering Rural Areas Policy," Finance Research Letters, Elsevier, vol. 69(PB).
    6. Shan Haonan & Zhao Kai, 2025. "Food Security and Digital Inclusive Finance: Evidence From China," SAGE Open, , vol. 15(3), pages 21582440251, August.
    7. Deng, Xiaojun & Chi, Shiyao & Yao, Liming & Zou, Jing, 2024. "FinTech and rural household entrepreneurship," Finance Research Letters, Elsevier, vol. 68(C).
    8. Su, Fangfang & Tao, Sumin & Ying, Ruiyao, 2025. "Agricultural transformation in the digital age: Digital inclusive finance and the development of new agricultural business entities," Finance Research Letters, Elsevier, vol. 72(C).
    9. Zhang, Fengyi & Guo, Ping & Fan, Xianxian, 2025. "Can fiscal support reduce the income gap between urban and rural residents? An analysis based on heterogeneity and threshold effects," Finance Research Letters, Elsevier, vol. 80(C).
    10. Sun, Xinyue & Wu, Qiong, 2026. "Artificial intelligence applications, regional inclusive finance development, and new quality productive," Finance Research Letters, Elsevier, vol. 87(C).
    11. Li, Xiaoxuan & Zhang, Shoufu, 2025. "Digital inclusive finance, income structure and common prosperity," Finance Research Letters, Elsevier, vol. 86(PE).
    12. Ding, Qingfeng & Rao, Yulei & Dai, Yifei, 2025. "Can digital financial inclusion alleviate energy poverty? Evidence from China," Energy, Elsevier, vol. 333(C).
    13. Li, Bin & Pan, Ya, 2025. "Digital inclusive finance and rural entrepreneurial survival: The moderating role of digital and financial literacy," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 1119-1136.
    14. Lizhi Tang & Mingcong Chen & Yan Tang, 2026. "Inclusive finance development and intergenerational income mobility: evidence from China," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 13(1), pages 1-15, December.
    15. Feng, Yanchao & Yan, Tong & Hu, Shilei & Zhang, Zhenhua, 2025. "The impact of digital inclusive finance on household carbon emissions: Empirical evidence from China," International Review of Financial Analysis, Elsevier, vol. 102(C).
    16. Zhou, Yufei & Li, Shuqin & Li, Hao & Wang, Minglan & Haneklaus, Nils & Li, Binlin, 2025. "Digital inclusive finance and resilient livelihoods: Lessons from China’s Rural Revitalization Strategy," Economic Analysis and Policy, Elsevier, vol. 88(C), pages 971-991.
    17. Shuaihang Yi & Ying Qi & Yongxiang Ya & Jiaying Shi & Yiniu Cui, 2024. "The impact of China’s digital inclusive financial development gap on the optimization of rural consumption structure," PLOS ONE, Public Library of Science, vol. 19(8), pages 1-26, August.
    18. Chen, Nan & Hu, Hao, 2025. "Rural inclusive finance, human capital and agricultural total factor productivity," Finance Research Letters, Elsevier, vol. 86(PA).
    19. Zhao, Guobin & Yuan, Yanzhe & Zhang, Yaning, 2025. "Exploring the mechanism and path of financial Literacy's impact on consumption of middle-aged and elderly rural residents: Micro-evidence from CHFS data," International Review of Economics & Finance, Elsevier, vol. 97(C).
    20. Ai, Hongshan & Xiang, Lin & Tan, Xiaoqing & Yao, Haorui & Han, Li, 2024. "The effects of place-based information technology policy on digital finance development: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 521-544.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:92:y:2026:i:c:s1544612326001030. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.