IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i22p16072-d1282623.html
   My bibliography  Save this article

Evolution, Forecasting, and Driving Mechanisms of the Digital Financial Network: Evidence from China

Author

Listed:
  • Rui Ding

    (College of Big Data Application and Economics (Guiyang College of Big Data Finance), Guizhou University of Finance and Economics, Guiyang 550025, China
    Key Laboratory of Green Fintech, Guizhou University of Finance and Economics, Guiyang 550025, China
    Regional Economic High-Quality Development Research Provincial Innovation Team, Guizhou University of Finance and Economics, Guiyang 550025, China
    These authors contributed equally to this work.)

  • Siwei Shen

    (College of Big Data Application and Economics (Guiyang College of Big Data Finance), Guizhou University of Finance and Economics, Guiyang 550025, China
    Key Laboratory of Green Fintech, Guizhou University of Finance and Economics, Guiyang 550025, China
    These authors contributed equally to this work.)

  • Yuqi Zhu

    (College of Big Data Application and Economics (Guiyang College of Big Data Finance), Guizhou University of Finance and Economics, Guiyang 550025, China
    Key Laboratory of Green Fintech, Guizhou University of Finance and Economics, Guiyang 550025, China)

  • Linyu Du

    (College of Big Data Application and Economics (Guiyang College of Big Data Finance), Guizhou University of Finance and Economics, Guiyang 550025, China
    Key Laboratory of Green Fintech, Guizhou University of Finance and Economics, Guiyang 550025, China)

  • Shihui Chen

    (College of Big Data Application and Economics (Guiyang College of Big Data Finance), Guizhou University of Finance and Economics, Guiyang 550025, China
    Key Laboratory of Green Fintech, Guizhou University of Finance and Economics, Guiyang 550025, China)

  • Juan Liang

    (College of Big Data Application and Economics (Guiyang College of Big Data Finance), Guizhou University of Finance and Economics, Guiyang 550025, China
    Key Laboratory of Green Fintech, Guizhou University of Finance and Economics, Guiyang 550025, China)

  • Kexing Wang

    (College of Big Data Application and Economics (Guiyang College of Big Data Finance), Guizhou University of Finance and Economics, Guiyang 550025, China
    Key Laboratory of Green Fintech, Guizhou University of Finance and Economics, Guiyang 550025, China)

  • Wenqian Xiao

    (College of Big Data Application and Economics (Guiyang College of Big Data Finance), Guizhou University of Finance and Economics, Guiyang 550025, China
    Key Laboratory of Green Fintech, Guizhou University of Finance and Economics, Guiyang 550025, China)

  • Yuxuan Hong

    (College of Big Data Application and Economics (Guiyang College of Big Data Finance), Guizhou University of Finance and Economics, Guiyang 550025, China
    Key Laboratory of Green Fintech, Guizhou University of Finance and Economics, Guiyang 550025, China)

Abstract

Digital finance (DF) is the engine driving financial inclusion worldwide, but the current uneven development of DF across regions would hinder this process. Based on cross-sectional data from 288 prefecture-level cities for the representative years 2011, 2014, 2017, and 2020, this paper uses geographic detector methods, social network analysis, and geographical and temporal weighted regression (GTWR) to explore the key drivers of urban DF, revealing and forecasting the DF network structural evolution and its driving mechanism. The results show that (1) economic level, traditional financial level, internet popularity, innovation level, and government intervention are the key drivers of DF development. (2) During the decade, the proportion of high-intensity urban interconnections increased from 3.3% to 12.3%. Most cities are at a low level of intensity, showing a polarization trend. (3) The cities with high betweenness centrality are concentrated in the megacities and the number is stable at 5. The structure of network communities is relatively stable, with the number reduced to 10. Cities with the greatest possibility of connection are located in the Pearl River Delta (PRD) and the Yangtze River Delta (YRD), accounting for 60% of the total. (4) The drivers of DF development present significant spatial heterogeneity over time. The traditional financial level shows a positive and continuous promoting effect, while government intervention plays a negative role.

Suggested Citation

  • Rui Ding & Siwei Shen & Yuqi Zhu & Linyu Du & Shihui Chen & Juan Liang & Kexing Wang & Wenqian Xiao & Yuxuan Hong, 2023. "Evolution, Forecasting, and Driving Mechanisms of the Digital Financial Network: Evidence from China," Sustainability, MDPI, vol. 15(22), pages 1-18, November.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:22:p:16072-:d:1282623
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/22/16072/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/22/16072/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nikolaus Hautsch & Julia Schaumburg & Melanie Schienle, 2015. "Financial Network Systemic Risk Contributions," Review of Finance, European Finance Association, vol. 19(2), pages 685-738.
    2. Jinhong Jackson Mi & Hongfei Zhu, 2017. "Can funding platforms’ self-initiated financial innovation improve credit availability? Evidence from China’s P2P market," Applied Economics Letters, Taylor & Francis Journals, vol. 24(6), pages 396-398, March.
    3. Dennis Quinn & Martin Schindler & A Maria Toyoda, 2011. "Assessing Measures of Financial Openness and Integration," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 59(3), pages 488-522, August.
    4. Hua Guo & Fan Gu & Yanling Peng & Xin Deng & Lili Guo, 2022. "Does Digital Inclusive Finance Effectively Promote Agricultural Green Development?—A Case Study of China," IJERPH, MDPI, vol. 19(12), pages 1-17, June.
    5. Peterson K. Ozili, 2018. "Impact of digital finance on financial inclusion and stability," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 18(4), pages 329-340, December.
    6. Hui Chu & Yuncai Ning & Xiaotong Qie, 2023. "Measurement and Spatial Correlation Analysis of the Development Level of the Digital Economy in the Yangtze River Delta Urban Agglomeration," Sustainability, MDPI, vol. 15(18), pages 1-16, September.
    7. Biyun Ren & Liuying Li & Hongmei Zhao & Yunbo Zhou, 2018. "The Financial Exclusion In The Development Of Digital Finance — A Study Based On Survey Data In The Jingjinji Rural Area," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(01), pages 65-82, March.
    8. Lv, Chengchao & Song, Jie & Lee, Chien-Chiang, 2022. "Can digital finance narrow the regional disparities in the quality of economic growth? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 502-521.
    9. Qian Wang & Jinbao Yang & Yung‐ho Chiu & Tai‐Yu Lin, 2020. "The impact of digital finance on financial efficiency," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(7), pages 1225-1236, October.
    10. Ozili, Peterson Kitakogelu, 2018. "Impact of Digital Finance on Financial Inclusion and Stability," MPRA Paper 84771, University Library of Munich, Germany.
    11. Chen, Shengqi & Zhang, Hong, 2021. "Does digital finance promote manufacturing servitization: Micro evidence from China," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 856-869.
    12. Li, Jie & Wu, Yu & Xiao, Jing Jian, 2020. "The impact of digital finance on household consumption: Evidence from China," Economic Modelling, Elsevier, vol. 86(C), pages 317-326.
    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. Zhao, Chunkai & Wang, Yuhang & Ge, Zhenyu, 2023. "Is digital finance environmentally friendly in China? Evidence from shared-bike trips," Transport Policy, Elsevier, vol. 138(C), pages 129-143.
    2. Hongyan Zhao & Wanteng Zheng & Irina Loutfoullina, 2022. "Digital Finance and Collaborative Innovation: Case Study of the Yangtze River Delta, China," Sustainability, MDPI, vol. 14(17), pages 1-15, August.
    3. Yue, Pengpeng & Korkmaz, Aslihan Gizem & Yin, Zhichao & Zhou, Haigang, 2022. "The rise of digital finance: Financial inclusion or debt trap?," Finance Research Letters, Elsevier, vol. 47(PA).
    4. Yan, Bin & Wang, Feng & Chen, Tian & Liu, Siyu & Bai, Xiaoxuan, 2023. "Digital finance, environmental regulation and emission reduction in manufacturing industry: New evidence incorporating dynamic spatial-temporal correlation and competition," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 750-763.
    5. Dongjing Chen & Xiaotong Guo, 2023. "Impact of the Digital Economy and Financial Development on Residents’ Consumption Upgrading: Evidence from Mainland China," Sustainability, MDPI, vol. 15(10), pages 1-25, May.
    6. Ren, Xiaohang & Zeng, Gudian & Zhao, Yang, 2023. "Digital finance and corporate ESG performance: Empirical evidence from listed companies in China," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    7. Isaac Appiah-Otoo & Na Song, 2021. "The Impact of Fintech on Poverty Reduction: Evidence from China," Sustainability, MDPI, vol. 13(9), pages 1-13, May.
    8. Li, Chengming & Huo, Peng & Wang, Zeyu & Zhang, Weiguang & Liang, Feiyan & Mardani, Abbas, 2023. "Digitalization generates equality? Enterprises’ digital transformation, financing constraints, and labor share in China," Journal of Business Research, Elsevier, vol. 163(C).
    9. Lanhua Zhang & Manxiu Ning & Chaoying Yang, 2023. "Evaluation of the Mechanism and Effectiveness of Digital Inclusive Finance to Drive Rural Industry Prosperity," Sustainability, MDPI, vol. 15(6), pages 1-17, March.
    10. Heping Ge & Lianzhen Tang & Xiaojun Zhou & Decai Tang & Valentina Boamah, 2022. "Research on the Effect of Rural Inclusive Financial Ecological Environment on Rural Household Income in China," IJERPH, MDPI, vol. 19(4), pages 1-16, February.
    11. Qian Wang & Jinbao Yang & Yung‐ho Chiu & Tai‐Yu Lin, 2020. "The impact of digital finance on financial efficiency," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(7), pages 1225-1236, October.
    12. Sodokin, Koffi & Djafon, Joseph Kokouvi & Dandonougbo, Yevessé & Akakpo, Afi & Couchoro, Mawuli K. & Agbodji, Akoété Ega, 2023. "Technological change, completeness of financing microstructures, and impact on well-being and income inequality," Telecommunications Policy, Elsevier, vol. 47(6).
    13. Li, Jie & Wu, Yu & Xiao, Jing Jian, 2020. "The impact of digital finance on household consumption: Evidence from China," Economic Modelling, Elsevier, vol. 86(C), pages 317-326.
    14. Li, Xin & Shao, Xuefeng & Chang, Tsangyao & Albu, Lucian Liviu, 2022. "Does digital finance promote the green innovation of China's listed companies?," Energy Economics, Elsevier, vol. 114(C).
    15. Hu, Debao & Zhai, Chenzhe & Zhao, Sibo, 2023. "Does digital finance promote household consumption upgrading? An analysis based on data from the China family panel studies," Economic Modelling, Elsevier, vol. 125(C).
    16. Minli Yu & Fu-Sheng Tsai & Hui Jin & Hejie Zhang, 2022. "Digital finance and renewable energy consumption: evidence from China," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-19, December.
    17. Zhong, Weiqiang & Jiang, Tingfeng, 2021. "Can internet finance alleviate the exclusiveness of traditional finance? evidence from Chinese P2P lending markets," Finance Research Letters, Elsevier, vol. 40(C).
    18. Baozhen Chen & Jinzheng Ren, 2022. "Does the Adoption of Digital Payment Improve the Financial Availability of Farmer Households? Evidence from China," Agriculture, MDPI, vol. 12(9), pages 1-20, September.
    19. Xiaomeng Lu & Jiaojiao Guo & Hailing Zhou, 2021. "Digital financial inclusion development, investment diversification, and household extreme portfolio risk," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(5), pages 6225-6261, December.
    20. Dong, Xiao & Yu, Mingzhe, 2023. "Does FinTech development facilitate firms' innovation? Evidence from China," International Review of Financial Analysis, Elsevier, vol. 89(C).

    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:gam:jsusta:v:15:y:2023:i:22:p:16072-:d:1282623. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.