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Joint effect of digital transformation and bank branch establishment on rural economic growth

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  • Zhou, Nan
  • Sun, Ruohan
  • Li, Yuan
  • Zhang, Longyao

Abstract

Using a panel fixed effects model based on panel data from 2012 to 2020, this study evaluates how bank branch establishment and digital transformation (DX) impact rural economic growth. Our findings indicate that bank branches establishment enhances rural economic growth; however, this effect is constrained by physical distance. Post-DX, the influence of bank branches establishment on economic growth intensifies, promoting local economic development and extending services to distant areas, thus narrowing regional economic disparities. Notably, national banks’ DX has a more significant effect on rural economic growth than that of regional banks. Our findings indicate that despite the advancements in DX, bank branches continue to positively contribute to economic growth. This finding provides some direction for subsequent financial policy reforms, such as whether bank branches are still needed.

Suggested Citation

  • Zhou, Nan & Sun, Ruohan & Li, Yuan & Zhang, Longyao, 2025. "Joint effect of digital transformation and bank branch establishment on rural economic growth," Research in International Business and Finance, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:riibaf:v:75:y:2025:i:c:s0275531924005312
    DOI: 10.1016/j.ribaf.2024.102738
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    References listed on IDEAS

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    More about this item

    Keywords

    Bank branches; Bank digital transformation; Economic growth; Financial inclusion; Digital technology;
    All these keywords.

    JEL classification:

    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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