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Digital Financial Inclusion, Spatial Spillover, and Household Consumption: Evidence from China

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  • Yao Li
  • Haiming Long
  • Jiajun Ouyang

Abstract

Financial development is often considered one of the main drivers promoting household consumption. As a form of financial development, whether digital financial inclusion can promote household consumption has been a concern for researchers and policymakers. Considering geographical connectivity characteristics, we examine the effects of digital financial inclusion on household consumption by applying spatial econometric models and using data from 31 provinces in China from 2013 to 2018. The impact of digital financial inclusion is further disaggregated into direct, indirect, and total impacts. The results show that if digital financial inclusion is improved by 1%, household consumption will correspondingly increase by 0.2207%. The spatial spillover effect on neighboring areas is negative: a 1% increase in the level of digital financial inclusion of nearby provinces leads to a 0.1289% decrease in household consumption in the local province. For policymakers, it is necessary to balance the development of digital financial inclusion and view different areas as a whole when making policies to promote consumption. Further analysis based on subsamples finds that the effect of digital financial inclusion on household consumption is more considerable for rural households than for urban households.

Suggested Citation

  • Yao Li & Haiming Long & Jiajun Ouyang, 2022. "Digital Financial Inclusion, Spatial Spillover, and Household Consumption: Evidence from China," Complexity, John Wiley & Sons, vol. 2022(1).
    • Handle: RePEc:wly:complx:v:2022:y:2022:i:1:n:8240806
    DOI: 10.1155/2022/8240806
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    8. Li, Yao, 2025. "How does digital financial inclusion affect households’ CO2? Micro-evidence from an emerging country," Journal of Economics and Business, Elsevier, vol. 133(C).
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    11. Yi Yang & Shuhe Shi & Jingjing Wu, 2022. "Digital Financial Inclusion to Corporation Value: The Mediating Effect of Ambidextrous Innovation," Sustainability, MDPI, vol. 14(24), pages 1-23, December.

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