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

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  • 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
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    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

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