IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0342432.html

Unveiling nonlinear effects of Digital Inclusive Finance on urban-rural integration: A threshold panel analysis of China

Author

Listed:
  • Ying Song
  • Yuanping Cao
  • Zhiyi Zhuo
  • Feifei Yang

Abstract

This paper examines the nonlinear effects of Digital Inclusive Finance (DIF) on urban–rural integration (URI) using a provincial panel for mainland China (31 provinces, 2011–2023). We construct a multidimensional URI index and decompose DIF into coverage breadth (D1), usage depth (D2) and digitalization level (D3). Estimation proceeds with two-way fixed-effects models and Hansen-style panel threshold regressions with bootstrap inference; robustness checks include placebo tests and instrumental-variable specifications. The evidence shows that DIF’s impact on URI is regime-dependent: marginal returns are limited at low development levels but increase sharply once DIF and complementary institutional conditions cross empirically identified thresholds. Disaggregation reveals that usage depth (D2) consistently promotes integration, whereas the benefits of coverage (D1) and digitalization (D3) materialize mainly in digitally mature regimes. Traditional finance exhibits declining marginal contribution beyond its effective range, underlining the catalytic role of digital systems. We document heterogeneity across regions and show that negative baseline coefficients on openness and education reflect spatial concentration rather than intrinsic harms. The findings reconcile mixed results in prior work and imply that policy should be threshold-aware: prioritize foundational access where coverage is low, while in advanced contexts emphasize usage, platform interoperability, and regulatory safeguards to manage platform concentration and distributional risks.

Suggested Citation

  • Ying Song & Yuanping Cao & Zhiyi Zhuo & Feifei Yang, 2026. "Unveiling nonlinear effects of Digital Inclusive Finance on urban-rural integration: A threshold panel analysis of China," PLOS ONE, Public Library of Science, vol. 21(2), pages 1-21, February.
    • Handle: RePEc:plo:pone00:0342432
    DOI: 10.1371/journal.pone.0342432
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0342432
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0342432&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0342432?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. McKinnon, Ronald I, 1973. "The Value-Added Tax and the Liberalization of Foreign Trade in Developing Economies: A Comment," Journal of Economic Literature, American Economic Association, vol. 11(2), pages 520-524, June.
    2. Seven, Unal & Coskun, Yener, 2016. "Does financial development reduce income inequality and poverty? Evidence from emerging countries," Emerging Markets Review, Elsevier, vol. 26(C), pages 34-63.
    3. King, Robert G. & Levine, Ross, 1993. "Finance, entrepreneurship and growth: Theory and evidence," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 513-542, December.
    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. Ayşe Aylin Bayar, 2023. "The impact of financial development on income inequality and poverty," PLOS ONE, Public Library of Science, vol. 18(10), pages 1-15, October.
    2. Paolo Coccorese & Roberto Dell'Anno, 2024. "The Role of Banks in Shaping Income Inequality: A Within‐Country Study," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 70(1), pages 129-153, March.
    3. Khwazi Magubane, 2025. "Determinants of Financial Stability and Development in South Africa: Insights from a Quantile ARDL Model of the South African Financial Cycle," JRFM, MDPI, vol. 18(9), pages 1-34, September.
    4. Ricardo Barradas & Rishi Lakhani, 2024. "The finance–inequality nexus in the era of financialisation: Evidence for Portugal," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 3510-3544, July.
    5. Amjad Taha & Mucahit Aydin & Taiwo Temitope Lasisi & Festus Victor Bekun & Narayan Sethi, 2023. "Toward a sustainable growth path in Arab economies: an extension of classical growth model," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-24, December.
    6. Nguyen, Canh Phuc & Su, Thanh Dinh, 2021. "Easing economic vulnerability: Multidimensional evidence of financial development," The Quarterly Review of Economics and Finance, Elsevier, vol. 81(C), pages 237-252.
    7. Cécile Couharde & Rémi Generoso, 2015. "Hydro-climatic thresholds and economic growth reversals in developing countries: an empirical investigation," EconomiX Working Papers 2015-26, University of Paris Nanterre, EconomiX.
    8. Perugini, Cristiano, 2020. "Patterns and drivers of household income dynamics in Russia: The role of access to credit," BOFIT Discussion Papers 11/2020, Bank of Finland Institute for Emerging Economies (BOFIT).
    9. Ayad Hicham, 2017. "Financial Development and Poverty Reduction Nexus: A Co-Integration and Causality Analysis in Selected Arabic Countries," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 3(2), pages 28-35, June.
    10. Tongurai, Jittima & Vithessonthi, Chaiporn, 2018. "The impact of the banking sector on economic structure and growth," International Review of Financial Analysis, Elsevier, vol. 56(C), pages 193-207.
    11. Astudillo, Alfonso & Braun, Matías & Castañeda, Pablo, 2011. "The going public decision and the structure of equity markets," Journal of International Money and Finance, Elsevier, vol. 30(7), pages 1451-1470.
    12. Dimelis, Sophia & Giotopoulos, Ioannis & Louri, Helen, 2015. "Can firms grow without credit?: evidence from the Euro Area, 2005-2011: a quantile panel analysis," LSE Research Online Documents on Economics 61157, London School of Economics and Political Science, LSE Library.
    13. repec:swn:wpaper:2023-02 is not listed on IDEAS
    14. Massimiliano Affinito, 2011. "Convergence clubs, the euro-area rank and the relationship between banking and real convergence," Temi di discussione (Economic working papers) 809, Bank of Italy, Economic Research and International Relations Area.
    15. Faroque Ahmed & Md. Jamal Hossain & Mohammad Tareque, 2020. "Investigating the Roles of Physical Infrastructure, Financial Development and Human Capital on Economic Growth in Bangladesh," Journal of Infrastructure Development, India Development Foundation, vol. 12(2), pages 154-175, December.
    16. Bagella, Michele & Becchetti, Leonardo & Hasan, Iftekhar, 2004. "The anticipated and concurring effects of the EMU: exchange rate volatility, institutions and growth," Journal of International Money and Finance, Elsevier, vol. 23(7-8), pages 1053-1080.
    17. Giorgio Bellettini & Carlotta Berti Ceroni & Giovanni Prarolo, 2013. "Persistence Of Politicians And Firms' Innovation," Economic Inquiry, Western Economic Association International, vol. 51(4), pages 2056-2070, October.
    18. Frank Iyekoretin Ogbeide & Hilary Kanwanye & Sunday Kadiri, 2016. "Revisiting the Determinants of Unemployment in Nigeria: Do Resource Dependence and Financial Development Matter?," African Development Review, African Development Bank, vol. 28(4), pages 430-443, December.
    19. Chen, Zhiyuan & Li, Yong & Zhang, Jie, 2016. "The bank–firm relationship: Helping or grabbing?," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 385-403.
    20. Yang, Yung Y. & Yi, Myung Hoon, 2008. "Does financial development cause economic growth? Implication for policy in Korea," Journal of Policy Modeling, Elsevier, vol. 30(5), pages 827-840.
    21. Howard Bodenhorn, 2016. "Two Centuries of Finance and Growth in the United States, 1790-1980," Working Papers id:11352, eSocialSciences.

    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:pone00:0342432. 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.