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Spatial effect of digital financial inclusion on the urban–rural income gap in China—analysis based on path dependence

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  • Mu-chen Li
  • Si-xian Feng
  • Xing Xie

Abstract

Digital financial inclusion (DFI) helps to narrow the income gap between urban and rural areas, but path dependence may lead to spatial agglomeration in the development of DFI, causing the spatial effect on the urban–rural income gap. This study mainly examines the mechanism and effect of DFI on the urban–rural income gap in China, including its spatial effect issues. Results show that China’s DFI has different impacts on the urban–rural income gap in the east, central, and western regions, showing evident spatial heterogeneity. In addition, the development of DFI has spatial agglomeration, and its impact on China’s urban–rural income gap also has a spatial spillover effect. Moreover, the spatial effect of DFI is mainly because of the path dependence on the development of traditional finance and digital technology. The spatial correlation between them is transmitted to DFI, and the impact of digital technology development is greater. Finally, corresponding policy recommendations are proposed based on the conclusions.

Suggested Citation

  • Mu-chen Li & Si-xian Feng & Xing Xie, 2023. "Spatial effect of digital financial inclusion on the urban–rural income gap in China—analysis based on path dependence," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 36(2), pages 2106279-210, December.
    • Handle: RePEc:taf:reroxx:v:36:y:2023:i:2:p:2106279
    DOI: 10.1080/1331677X.2022.2106279
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