IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0263915.html
   My bibliography  Save this article

Has digital finance widened the income gap?

Author

Listed:
  • Lianying Yao
  • Xiaoxiao Ma

Abstract

Using the statistical data of 280 prefectural-level cities in China from 2011 to 2020, this paper empirically tests the relationship between digital finance and residents’ income in a linear and nonlinear model based on the G-J model theory, respectively. The study aims to discuss and analyze the impact of digital finance development on income distribution in the context of the current situation of digital finance development in China and further explore how to make digital finance better regulate the income distribution of residents. The innovation of this paper is to use two nonlinear methods to verify the Kuznets effect and threshold characteristics of digital financial development affecting the income distribution of residents based on linear analysis and explore the relationship between n digital economic development the current income gap more comprehensively. The study shows a Kuznets effect of digital finance development on the income distribution of Chinese residents. Thus, most regions in China have not yet crossed the inflection point of the bell-shaped curve, and the income gap within areas will continue to increase with the development of digital finance. By constructing a threshold model, it is found that the positive effect of digital finance on income disparity may initially increase with the increase of regional economic level. Still, when the regional economic development reaches a higher stage, the effect will tend to fall back. As a result, the negative impact of digital finance development on residents’ income distribution will be significantly reduced at that time.

Suggested Citation

  • Lianying Yao & Xiaoxiao Ma, 2022. "Has digital finance widened the income gap?," PLOS ONE, Public Library of Science, vol. 17(2), pages 1-20, February.
    • Handle: RePEc:plo:pone00:0263915
    DOI: 10.1371/journal.pone.0263915
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0263915
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0263915&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0263915?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Tetsuo Ono, 2015. "Public education and social security: a political economy approach," Economics of Governance, Springer, vol. 16(1), pages 1-25, February.
    2. Balcázar, Carlos Felipe, 2015. "Lower bounds on inequality of opportunity and measurement error," Economics Letters, Elsevier, vol. 137(C), pages 102-105.
    3. David Devins & Alison Darlow & Vikki Smith, 2002. "Lifelong Learning and Digital Exclusion: Lessons from the Evaluation of an ICT Learning Centre and an Emerging Research Agenda," Regional Studies, Taylor & Francis Journals, vol. 36(8), pages 941-945.
    4. Beatriz Fernández-Olit & Juan Diego Paredes-Gázquez & Marta de la Cuesta-González, 2018. "Are Social and Financial Exclusion Two Sides of the Same Coin? An Analysis of the Financial Integration of Vulnerable People," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 135(1), pages 245-268, January.
    5. Daron Acemoglu & Pascual Restrepo, 2017. "Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation," American Economic Review, American Economic Association, vol. 107(5), pages 174-179, May.
    6. Muto, Megumi & Yamano, Takashi, 2009. "The Impact of Mobile Phone Coverage Expansion on Market Participation: Panel Data Evidence from Uganda," World Development, Elsevier, vol. 37(12), pages 1887-1896, December.
    7. Gould, David M. & Melecky, Martin & Panterov, Georgi, 2016. "Finance, growth and shared prosperity: Beyond credit deepening," Journal of Policy Modeling, Elsevier, vol. 38(4), pages 737-758.
    8. Abidin Alhassan & Leon Li & Krishna Reddy & Geeta Duppati, 2019. "The impact of formal financial inclusion on informal financial intermediation and cash preference: evidence from Africa," Applied Economics, Taylor & Francis Journals, vol. 51(42), pages 4597-4614, September.
    9. Miguel Foguel & Fernando Veloso, 2014. "Inequality of opportunity in daycare and preschool services in Brazil," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(2), pages 191-220, June.
    10. Sin-Yu Ho & Bernard Njindan Iyke, 2017. "Determinants of stock market development: a review of the literature," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 34(1), pages 143-164, March.
    11. Munyegera, Ggombe Kasim & Matsumoto, Tomoya, 2016. "Mobile Money, Remittances, and Household Welfare: Panel Evidence from Rural Uganda," World Development, Elsevier, vol. 79(C), pages 127-137.
    12. Alfredo Martin-Oliver, 2019. "Financial exclusion and branch closures in Spain after the Great Recession," Regional Studies, Taylor & Francis Journals, vol. 53(4), pages 562-573, April.
    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. Robert Jensen, 2007. "The Digital Provide: Information (Technology), Market Performance, and Welfare in the South Indian Fisheries Sector," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 879-924.
    15. Ruth Towse, 2017. "Economics of music publishing: copyright and the market," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 41(4), pages 403-420, November.
    16. Xue Wang & Guangwen He, 2020. "Digital Financial Inclusion and Farmers’ Vulnerability to Poverty: Evidence from Rural China," Sustainability, MDPI, vol. 12(4), pages 1-18, February.
    17. Luo, Xiaohu & Caron, Justin & Karplus, Valerie J. & Zhang, Da & Zhang, Xiliang, 2016. "Interprovincial migration and the stringency of energy policy in China," Energy Economics, Elsevier, vol. 58(C), pages 164-173.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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).
    2. Mei Wang & Yifan Zheng & Shaojun Ma & Jun Lu, 2024. "Does higher vocational education matter for rural revitalization? Evidence from China," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-15, December.
    3. Xuan Zhang, 2023. "The impact of digital finance on corporate labor productivity: evidence from Chinese-listed companies," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 50(3), pages 527-550, September.
    4. Aujla, Navneet & Frost, Helen & Guthrie, Bruce & Hanratty, Barbara & Kaner, Eileen & O'Donnell, Amy & Ogden, Margaret E. & Pain, Helen G. & Shenkin, Susan D. & Mercer, Stewart W., 2023. "A comparative overview of health and social care policy for older people in England and Scotland, United Kingdom (UK)," Health Policy, Elsevier, vol. 132(C).
    5. PU, Zhengning & FEI, Jinhua, 2022. "The impact of digital finance on residential carbon emissions: Evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 515-527.
    6. Yang, Ping & Lv, Yanqin & Chen, Xiaodan & Lv, Juan, 2024. "Digital finance, natural resource constraints and firms' low-carbon behavior: Evidence from listed companies," Resources Policy, Elsevier, vol. 89(C).
    7. Shang, Rui, 2023. "Divide or dividend: How digital finance impacts educational equality," Finance Research Letters, Elsevier, vol. 55(PA).
    8. Li Chen & Yuanbo Zhang, 2023. "Does the Development of the Digital Economy Promote Common Prosperity?—Analysis Based on 284 Cities in China," Sustainability, MDPI, vol. 15(5), pages 1-16, March.
    9. Luo, Haotian & Hu, Qing, 2024. "A re-examination of the influence of human capital on urban-rural income gap in China: College enrollment expansion, digital economy and spatial spillover," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 494-519.
    10. Jing Zhao & Wenshun Li, 2024. "The Impact of Digital Finance on the Urban–Rural Income Gap in China: The Mediating Role of Employment Structural Transformation," Sustainability, MDPI, vol. 16(19), pages 1-23, September.
    11. Mao Wu & Ying Ma & Yu Gao & Zhanhui Ji, 2024. "The impact of digital economy on income inequality from the perspective of technological progress-biased transformation: evidence from China," Empirical Economics, Springer, vol. 67(2), pages 567-607, August.
    12. Zhang, Yunhui & Zhao, Wei, 2024. "Social capital's role in mitigating economic vulnerability: Understanding the impact of income disparities on farmers' livelihoods," World Development, Elsevier, vol. 177(C).

    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. Sekabira, Haruna & Qaim, Matin, 2017. "Can mobile phones improve gender equality and nutrition? Panel data evidence from farm households in Uganda," Food Policy, Elsevier, vol. 73(C), pages 95-103.
    2. 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.
    3. Miyajima, Ken, 2022. "Mobile phone ownership and welfare: Evidence from South Africa’s household survey," World Development, Elsevier, vol. 154(C).
    4. Sekabira, Haruna & Qaim, Matin, 2016. "Mobile Money, Agricultural Marketing, and Off-Farm Income in Uganda," GlobalFood Discussion Papers 234998, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    5. Abate, Gashaw T. & Abay, Kibrom A. & Chamberlin, Jordan & Kassim, Yumna & Spielman, David J. & Paul Jr Tabe-Ojong, Martin, 2023. "Digital tools and agricultural market transformation in Africa: Why are they not at scale yet, and what will it take to get there?," Food Policy, Elsevier, vol. 116(C).
    6. Sekabira, Haruna & Qaim, Matin, 2017. "Can Mobile Phones Improve Gender Equality and Nutrition? Panel Data Evidence from Farm Households in Uganda," GlobalFood Discussion Papers 256215, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    7. Xiaowen Xie, 2023. "Analyzing the Impact of Digital Inclusive Finance on Poverty Reduction: A Study Based on System GMM in China," Sustainability, MDPI, vol. 15(18), pages 1-20, September.
    8. Jensen, Robert T., 2009. "Information, Efficiency And Welfare In Agricultural Markets," 2009 Conference, August 16-22, 2009, Beijing, China 53206, International Association of Agricultural Economists.
    9. Sugata Bag & Suman Seth, 2016. "Understanding Standard of Living and Correlates in Slums - An Analysis Using Monetary Versus Multidimensional Approaches in Three Indian Cities," Working papers 263, Centre for Development Economics, Delhi School of Economics.
    10. Fujii, Tomoki & Shonchoy, Abu S., 2020. "Fertility and rural electrification in Bangladesh," Journal of Development Economics, Elsevier, vol. 143(C).
    11. Wouter Zant, 2012. "How does Market Access affect Smallholder Behavior? The Case of Tobacco Marketing in Malawi," Tinbergen Institute Discussion Papers 12-088/V, Tinbergen Institute, revised 25 Aug 2014.
    12. Wouter Zant, 2018. "Trains, Trade, and Transaction Costs: How Does Domestic Trade by Rail Affect Market Prices of Malawi Agricultural Commodities?," The World Bank Economic Review, World Bank, vol. 32(2), pages 334-356.
    13. Wen Chen & Changyi Zhu & Qi Cheung & Siying Wu & Jun Zhang & Jia Cao, 2024. "How does digitization enable green innovation? Evidence from Chinese listed companies," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 3832-3854, July.
    14. Wouter Zant, 2017. "Impact of Mobile Phones on Staple Food Markets in Mozambique: Improved Arbitrage or Increased Rent Extraction?," Tinbergen Institute Discussion Papers 17-021/V, Tinbergen Institute, revised 26 Jan 2018.
    15. Kyeong Ho Lee & Marc F. Bellemare, 2013. "Look Who's Talking: The Impacts of the Intrahousehold Allocation of Mobile Phones on Agricultural Prices," Journal of Development Studies, Taylor & Francis Journals, vol. 49(5), pages 624-640, May.
    16. Hawthorne, Ryan & Grzybowski, Lukasz, 2021. "Distribution of the benefits of regulation vs. competition: The case of mobile telephony in South Africa," International Journal of Industrial Organization, Elsevier, vol. 74(C).
    17. Abate, Gashaw T. & Bernard, Tanguy, 2017. "Farmers’ quality assessment of their crops and its impact on commercialization behavior: A field experiment in Ethiopia," IFPRI discussion papers 1624, International Food Policy Research Institute (IFPRI).
    18. Jonathan Donner & Marcela X. Escobari, 2010. "A review of evidence on mobile use by micro and small enterprises in developing countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(5), pages 641-658.
    19. Simontinti Das & Amrita Chatterjee, 2021. "Role of ICT Dissemination and Digital Finance in Poverty Eradication and Income Inequality Reduction: A Sub-national Level Study from India," Working Papers 2021-210, Madras School of Economics,Chennai,India.
    20. Bertschek, Irene & Briglauer, Wolfgang & Hüschelrath, Kai & Kauf, Benedikt & Niebel, Thomas, 2016. "The economic impacts of telecommunications networks and broadband internet: A survey," ZEW Discussion Papers 16-056, ZEW - Leibniz Centre for European Economic Research.

    More about this item

    Statistics

    Access and download statistics

    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:plo:pone00:0263915. 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: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    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.