IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v102y2025ics1059056025004885.html

Evaluating digital financial inclusion's impact on regional economic efficiency in China

Author

Listed:
  • Guan, Zhihao
  • Han, Jian

Abstract

Digital financial inclusion (DFI) narrows the gap in regional financial services, reshapes regional division of capital and labor, and enhances overall economic efficiency. Therefore, this study examines how DFI affects regional economic efficiency using Chinese provincial panel data from 2011 to 2020. The results show that DFI significantly improves regional economic efficiency measured by technical efficiency (TE), particularly by narrowing the urban–rural income gap and enhancing factor accessibility in vulnerable areas and groups. This effect is more pronounced when supported by well-developed transportation infrastructure and traditional finance and is based on a certain level of economic development. Mechanism analysis confirms that DFI promotes efficiency by stimulating entrepreneurial activity and reducing educational gap.

Suggested Citation

  • Guan, Zhihao & Han, Jian, 2025. "Evaluating digital financial inclusion's impact on regional economic efficiency in China," International Review of Economics & Finance, Elsevier, vol. 102(C).
    • Handle: RePEc:eee:reveco:v:102:y:2025:i:c:s1059056025004885
    DOI: 10.1016/j.iref.2025.104325
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056025004885
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2025.104325?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. Wurgler, Jeffrey, 2000. "Financial markets and the allocation of capital," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 187-214.
    2. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    3. Miller, Stephen M. & Upadhyay, Mukti P., 2000. "The effects of openness, trade orientation, and human capital on total factor productivity," Journal of Development Economics, Elsevier, vol. 63(2), pages 399-423, December.
    4. Ding, Ning & Xu, Lei & Wu, Xiao & Dai, Zixuan, 2025. "Explicit deposit insurance, active risk taking, and bank efficiency in China," International Review of Financial Analysis, Elsevier, vol. 102(C).
    5. Bernini, Cristina & Galli, Federica, 2023. "Innovation, productivity and spillover effects in the Italian accommodation industry," Economic Modelling, Elsevier, vol. 119(C).
    6. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    7. repec:bla:scandj:v:87:y:1985:i:4:p:594-604 is not listed on IDEAS
    8. Kaldor, Nicholas, 1970. "The Case for Regional Policies," Scottish Journal of Political Economy, Scottish Economic Society, vol. 17(3), pages 337-348, November.
    9. Gang, Cuiui & Li, Juanwei & Hu, Haiqing & Wei, Wei, 2023. "Dynamic co-movement between economic growth and language: A new perspective of technological progress," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 705-721.
    10. Matricano, Diego, 2022. "The influence of gender on technology transfer processes managed in Italian Young Innovative Companies: A stochastic frontier analysis," Technovation, Elsevier, vol. 111(C).
    11. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    12. Jiang, Youxue, 2024. "Public service equalization, digital financial inclusion and the rural revitalization: Evidence from Chinese 283 prefecture-level cities," International Review of Economics & Finance, Elsevier, vol. 96(PB).
    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. Henry, Michael & Kneller, Richard & Milner, Chris, 2009. "Trade, technology transfer and national efficiency in developing countries," European Economic Review, Elsevier, vol. 53(2), pages 237-254, February.
    2. Brian Tavonga Mazorodze & Harris Maduku, 2024. "Does Education Help Local Economies Reach Economic Potential? Evidence from South Africa," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 10(1), pages 57-86, January.
    3. Wang, Miao & Wong, M. C. Sunny, 2012. "International R&D Transfer and Technical Efficiency: Evidence from Panel Study Using Stochastic Frontier Analysis," World Development, Elsevier, vol. 40(10), pages 1982-1998.
    4. Tom Kompas & Tuong Nhu Che & R. Quentin Grafton, 2004. "Technical efficiency effects of input controls: evidence from Australia's banana prawn fishery," Applied Economics, Taylor & Francis Journals, vol. 36(15), pages 1631-1641.
    5. Lundgren, Tommy & Marklund, Per-Olov & Zhang, Shanshan, 2016. "Industrial energy demand and energy efficiency – Evidence from Sweden," Resource and Energy Economics, Elsevier, vol. 43(C), pages 130-152.
    6. Andriakopoulos, Konstantinos & Ladas, Augoustinos & Andriakopoulos, Panagiotis, 2020. "Bank efficiency and leasing in U.S.A. banking system," MPRA Paper 112645, University Library of Munich, Germany.
    7. Giovanni Calice & Levent Kutlu & Ming Zeng, 2021. "Understanding US firm efficiency and its asset pricing implications," Empirical Economics, Springer, vol. 60(2), pages 803-827, February.
    8. António Afonso & Ana Patricia Montes & José M. Domínguez, 2024. "Measuring Tax Burden Efficiency in OECD Countries: An International Comparison," CESifo Working Paper Series 11333, CESifo.
    9. Khanal, Aditya & Koirala, Krishna & Regmi, Madhav, "undated". "Do Financial Constraints Affect Production Efficiency in Drought Prone Areas? A Case from Indonesian Rice Growers," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230087, Southern Agricultural Economics Association.
    10. Firna Varina & Sri Hartoyo & Nunung Kusnadi & Amzul Rifin, 2020. "The Determinants of Technical Efficiency of Oil Palm Smallholders in Indonesia," International Journal of Economics and Financial Issues, Econjournals, vol. 10(6), pages 89-93.
    11. Dhehibi, Boubaker & Lachaal, Lassaad & Elloumi, Mohamed & Messaoud, Emna B., 2007. "Measurement and Sources of Technical Inefficiency in the Tunisian Citrus Growing Sector," 103rd Seminar, April 23-25, 2007, Barcelona, Spain 9391, European Association of Agricultural Economists.
    12. Noel Uri, 2003. "The Effect of Incentive Regulation in Telecommunications in the United States," Quality & Quantity: International Journal of Methodology, Springer, vol. 37(2), pages 169-191, May.
    13. Tauer, Loren W. & Mishra, Ashok K., 2005. "U.S. Dairy Farm Cost Efficiency," Working Papers 127079, Cornell University, Department of Applied Economics and Management.
    14. Gangopadhyay, Partha & Jain, Siddharth & Bakry, Walid, 2022. "In search of a rational foundation for the massive IT boom in the Australian banking industry: Can the IT boom really drive relationship banking?," International Review of Financial Analysis, Elsevier, vol. 82(C).
    15. Williams, Jonathan, 2004. "Determining management behaviour in European banking," Journal of Banking & Finance, Elsevier, vol. 28(10), pages 2427-2460, October.
    16. Manish Roy & Ritwik Mazumder, 2016. "Technical Efficiency of Fish Catch in Traditional Fishing: A Study in Southern Assam," Journal of Regional Development and Planning, Rajarshi Majumder, vol. 5(1), pages 55-68.
    17. Veronika Fenyves & Tibor Tarnóczi & Zoltán Bács & Dóra Kerezsi & Péter Bajnai & Mihály Szoboszlai, 2022. "Financial efficiency analysis of Hungarian agriculture, fisheries and forestry sector," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 68(11), pages 413-426.
    18. Simar, Leopold & Wilson, Paul W., 2007. "Estimation and inference in two-stage, semi-parametric models of production processes," Journal of Econometrics, Elsevier, vol. 136(1), pages 31-64, January.
    19. Tovar, Beatriz & Wall, Alan, 2015. "Can ports increase traffic while reducing inputs? Technical efficiency of Spanish Port Authorities using a directional distance function approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 71(C), pages 128-140.
    20. George E. Battese & D. S. Prasada Rao, 2002. "Technology Gap, Efficiency, and a Stochastic Metafrontier Function," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 1(2), pages 87-93, August.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    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:reveco:v:102:y:2025:i:c:s1059056025004885. 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/inca/620165 .

    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.