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Digital financial inclusion and common prosperity in China: Spatial spillovers and regional divergence

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  • Song, Qinyue
  • Yan, Mingyi
  • Tang, Shiyu
  • Han, Zhenfu
  • Fang, Fei

Abstract

This study evaluates how digital financial inclusion (DFI) shapes regional common prosperity in China. Results using panel data from 275 prefecture-level cities (2011–2021) and spatial econometric models reveal that DFI significantly promotes local prosperity but has negative spillover effects on neighboring regions. Employment and innovation are demonstrated to be key mediating mechanisms, and nonlinear threshold effects indicate stage-dependent impacts. Regional heterogeneity further reveals stronger benefits for eastern provinces. These findings highlight the dual role of DFI as a driver and a divider, emphasizing the need for balanced and coordinated policy interventions.

Suggested Citation

  • Song, Qinyue & Yan, Mingyi & Tang, Shiyu & Han, Zhenfu & Fang, Fei, 2026. "Digital financial inclusion and common prosperity in China: Spatial spillovers and regional divergence," Finance Research Letters, Elsevier, vol. 94(C).
    • Handle: RePEc:eee:finlet:v:94:y:2026:i:c:s1544612326001558
    DOI: 10.1016/j.frl.2026.109624
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