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Use of Theil for a Specific Duality Economy: Assessing the Impact of Digital Inclusive Finance on Urban-Rural Income Gap in Chongqing

Author

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  • Nai Chiek Aik

    (Faculty of Accountancy and Management, Universiti Tunku Abdul Rahman, Kajang 43000, Malaysia)

  • Qiurui Zhang

    (School of Accounting, Chongqing Finance and Economics College, Chongqing 401320, China)

Abstract

This study uses panel data from 2016 to 2020 to examine the impact of digital financial inclusion on income inequality in the urban-rural divide of Chongqing, China. The results suggest that increasing access to digital financial services could help narrow the income gap between urban and rural areas. However, the impact becomes significantly positive when controlling for other variables with the Random Effects regression model. Among the control variables, the urbanization rate and government expenditure are found to be significant determinants of income inequality in Chongqing. These findings offer insights for policymakers on the potential benefits of targeted interventions to promote financial inclusion and sustainable urbanization, while ensuring effective allocation of government spending to reduce income inequality.

Suggested Citation

  • Nai Chiek Aik & Qiurui Zhang, 2023. "Use of Theil for a Specific Duality Economy: Assessing the Impact of Digital Inclusive Finance on Urban-Rural Income Gap in Chongqing," FinTech, MDPI, vol. 2(4), pages 1-12, September.
    • Handle: RePEc:gam:jfinte:v:2:y:2023:i:4:p:37-679:d:1248537
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    References listed on IDEAS

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