Can digital finance improve farmers’ agricultural production resilience?

PurposeThis article aims to study the impact of digital finance on the resilience of farmers’ agricultural production. The resilience of farmers’ agricultural production plays a significant role in ensuring national food security. Hence, it is worthwhile to explore whether digital finance can enhance this resilience.Design/methodology/approachThis study investigates the impact of digital finance on the resilience of farmers’ agricultural production by utilizing data from the China Household Finance Survey (CHFS) and the Chinese Family Database (CFD) in 2015, 2017 and 2019. This study employs a fixed effects model and a mediation effect model to ascertain the impact of digital finance on the resilience of farmers’ agricultural production. Furthermore, the research addresses the issue of endogeneity using propensity score matching, a treatment effects model and an instrumental variable approach.FindingsThe findings demonstrate that digital finance can indeed enhance the resilience of farmers’ agricultural production. Mechanism analysis reveals that digital finance can enhance the resilience of farmers’ agricultural production by expanding the scale of financing for farmers, improving their information availability and increasing their level of insurance participation. The heterogeneity study finds that digital finance is more effective in increasing farmers’ resilience to agricultural production risks among the group of farmers with high agricultural asset shares and high financial literacy.Originality/valueThe study is of great significance for digital finance to better serve farmers’ agricultural production, ensure national food security and the supply of important agricultural products and comprehensively promote rural revitalization.