The Impact of Internet Finance on Household Risk Asset Allocation-Mechanism Analysis

Chinese households primarily rely on savings as the main component of their assets, yet the returns are distressingly low. Additionally, Chinese residents encounter challenges when it comes to preserving their wealth, as they have limited investment opportunities and face other obstacles. Nevertheless, the emergence of Internet finance, driven by the development of network information technology, has brought about substantial changes in how we produce, consume, make payments, and manage our investments and finances. This paper aims to explore the potential impact of Internet finance on residents’ financial investment by conducting a comprehensive analysis.To achieve this objective, I employ a sample from the 2017 CHFS household financial survey data. The results reveal that the utilization of computers increases the proportion of households’ allocation of financial assets. Furthermore, regardless of the inclusion of control variables, the regression coefficients are significant. This result suggests that a higher proportion of mobile payment usage is associated with an increased allocation of financial assets by households. These outcomes offer valuable insights for policymakers to introduce effective measures promoting rational household investment, optimizing the allocation of residents’ investments, stimulating overall social investment, and refining the management of residents’ investment portfolios and risk control. By addressing these challenges, we can strive towards improving the financial well-being of Chinese households.