IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0278956.html

Digital financial inclusion and welfare: Effect, mechanism and imbalance

Author

Listed:
  • YanLong Li
  • Jin Peng

Abstract

This study utilizes provincial panel data from China spanning from 2013 to 2019 and considers indices such as residents’ income, employment, housing, education, and medical care to comprehensively measure the welfare index of each province using the coefficient of variation. It also examines the impact and mechanism of digital financial inclusion on welfare and evaluates its influence on welfare imbalance through panel data models and RIF regression. The estimation results of digital financial inclusion on welfare indicate that digital financial inclusion is an important driver elevating the income, employment, housing, education, medical treatment and other welfares of Chinese residents, and the conclusion remains robust after using instrumental variable estimation and replacing the measurement method of welfare. Regional differences reveal that digital financial inclusion has a greater contribution to the welfare in the Midwest. The effect mechanism test shows that digital financial inclusion improves the welfare by creating employment opportunities and plays a greater role in the Midwest, and will also improve the welfare by increasing the welfare expenditure. However, this mechanism will exacerbate the welfare imbalance between the Midwest and East. The estimation results of digital financial inclusion on the welfare imbalance show that digital financial inclusion reduces welfare imbalance between the central and western regions and the eastern regions, as well as within the central and western regions.

Suggested Citation

  • YanLong Li & Jin Peng, 2023. "Digital financial inclusion and welfare: Effect, mechanism and imbalance," PLOS ONE, Public Library of Science, vol. 18(12), pages 1-20, December.
    • Handle: RePEc:plo:pone00:0278956
    DOI: 10.1371/journal.pone.0278956
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0278956
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0278956&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0278956?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. Asli Demirgüç-Kunt & Leora Klapper & Dorothe Singer & Saniya Ansar & Jake Hess, 2020. "The Global Findex Database 2017: Measuring Financial Inclusion and Opportunities to Expand Access to and Use of Financial Services," The World Bank Economic Review, World Bank, vol. 34(Supplemen), pages 2-8.
    2. Peterson K. Ozili, 2021. "Financial inclusion research around the world: A review," Forum for Social Economics, Taylor & Francis Journals, vol. 50(4), pages 457-479, October.
    3. Pascaline Dupas & Jonathan Robinson, 2013. "Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 163-192, January.
    4. Pearce, Douglas, 2011. "Financial inclusion in the Middle East and North Africa : analysis and roadmap recommendations," Policy Research Working Paper Series 5610, The World Bank.
    5. Ali, Abd Elrahman Elzahi Saaid, 2019. "Empowering Women through Financial Inclusion: Some Evidence from Comoros," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 9(2), pages 256-270.
    6. Kellee S. Tsai, 2017. "FinTech and Financial Inclusion in China," HKUST IEMS Thought Leadership Brief Series 2017-20, HKUST Institute for Emerging Market Studies, revised Nov 2017.
    7. Robert G. King & Ross Levine, 1993. "Finance and Growth: Schumpeter Might Be Right," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 717-737.
    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. Xiao, Biyun & Li, Haibo, 2025. "Financial efficiency, green innovation and green total factor productivity," Finance Research Letters, Elsevier, vol. 76(C).
    2. Cong Xu & Feng Wu & Jingran Lin & Yie-Ru Chiu, 2025. "The Impact of Land Circulation on Common Prosperity in the Digital Economy Context," Discrete Dynamics in Nature and Society, John Wiley & Sons, vol. 2025(1).

    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. Peterson K. Ozili, 2021. "Financial inclusion research around the world: A review," Forum for Social Economics, Taylor & Francis Journals, vol. 50(4), pages 457-479, October.
    2. Muri Wole Adedokun & Mehmet Ağa, 2023. "Financial inclusion: A pathway to economic growth in Sub‐Saharan African economies," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 2712-2728, July.
    3. Ojah, Kalu & Kodongo, Odongo, 2024. "Effective financial inclusion and the need to put the horse before the cart: Saving!," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    4. E. Bonhoure & R. Bawack, 2024. "Review of the Coverage of Financial Inclusion Research Since the Implementation of the Sustainable Development Goals: What Has Changed?," Post-Print hal-04828293, HAL.
    5. Meghana Ayyagari & Thorsten Beck, 2015. "Financial Inclusion in Asia: An Overview," ADB Economics Working Paper Series 449, Asian Development Bank.
    6. Shahid Manzoor Shah & Amjad Ali, 2022. "A Survey on Financial Inclusion: Theoretical and Empirical Literature Review," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(4), pages 310-330, December.
    7. Favourate Y. Mpofu & David Mhlanga, 2022. "Digital Financial Inclusion, Digital Financial Services Tax and Financial Inclusion in the Fourth Industrial Revolution Era in Africa," Economies, MDPI, vol. 10(8), pages 1-22, July.
    8. Anzoategui, Diego & Demirgüç-Kunt, Asli & Martínez Pería, María Soledad, 2014. "Remittances and Financial Inclusion: Evidence from El Salvador," World Development, Elsevier, vol. 54(C), pages 338-349.
    9. Mohammed Seid Hussen & Mustafe Abdi Mohamed, 2023. "Impact of financial inclusion on household welfare in Ethiopia," Future Business Journal, Springer, vol. 9(1), pages 1-12, December.
    10. Elikplimi K. Agbloyor & Simplice A. Asongu & Peter Muriu, 2021. "Sustainability, Growth and Impact of MFIs in Africa," Working Papers of the African Governance and Development Institute. 21/083, African Governance and Development Institute..
    11. Novat Pugo Sambodo & Riswanti Budi Sekaringsih & Meikha Azzani & Esa Assyahid, 2016. "Indonesian Muslim Household Financial Inclusion Profile: Evidence from IFLS4 and IFLS5 Panel Data," Universitas Gadjah Mada Working Papers on Islamic Economics and Finance 2017007, Universitas Gadjah Mada, Faculty of Economics and Business.
    12. Ajide Folorunsho M., 2021. "Financial Inclusion and Labour Market Participation of Women in Selected Countries in Africa," Economics and Culture, Paradigm, vol. 18(1), pages 15-31, June.
    13. Weidong Chen & Xiaohui Yuan, 2021. "Financial inclusion in China: an overview," Frontiers of Business Research in China, Springer, vol. 15(1), pages 1-21, December.
    14. Menyelim M. Chima & Abiola Ayopo Babajide & Alex Adegboye & Segun Kehinde & Oluwatobi Fasheyitan, 2021. "The Relevance of Financial Inclusion on Sustainable Economic Growth in Sub-Saharan African Nations," Sustainability, MDPI, vol. 13(10), pages 1-20, May.
    15. Hunjra, Ahmed Imran & Islam, Faridul & Verhoeven, Peter & Hassan, M. Kabir, 2022. "The impact of a dual banking system on macroeconomic efficiency," Research in International Business and Finance, Elsevier, vol. 61(C).
    16. Paula Cruz-García & María del Carmen Dircio Palacios Macedo & Emili Tortosa-Ausina, 2020. "What drives financial exclusion in Mexican municipalities?," Working Papers 2020/19, Economics Department, Universitat Jaume I, Castellón (Spain).
    17. Laxmi Pandey & P. V. Rajeev & Arpit Saxena & Digvijay Pandey, 2024. "“Investigating Financial Literacy’s Influence on Self-Help Group-Bank Linkage Programme with Special Reference to the Indian state of Uttarakhand”," Circular Economy and Sustainability, Springer, vol. 4(3), pages 2339-2364, September.
    18. Shailesh Rastogi & Akanksha Goel & Adesh Doifode, 2023. "Open APIs in banking and inclusive growth: an innovation to support the poverty eradication programs in India," Journal of Banking Regulation, Palgrave Macmillan, vol. 24(4), pages 432-444, December.
    19. Antonia Grohmann & Lukas Menkhoff, 2020. "The Relationship between Financial Literacy and Financial Inclusion," Discussion Papers of DIW Berlin 1914, DIW Berlin, German Institute for Economic Research.
    20. Aman Pushp & Rahul Singh Gautam & Vikas Tripathi & Jagjeevan Kanoujiya & Shailesh Rastogi & Venkata Mrudula Bhimavarapu & Neha Parashar, 2023. "Impact of Financial Inclusion on India’s Economic Development under the Moderating Effect of Internet Subscribers," JRFM, MDPI, vol. 16(5), pages 1-15, May.

    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:pone00:0278956. 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.