Impact of digital inclusive finance on agricultural total factor productivity in Zhejiang Province from the perspective of integrated development of rural industries

Abstract

Improving agricultural total factor productivity is crucial for comprehensive rural revitalization and building a strong agricultural nation. Digital inclusive finance amalgamates the benefits of digital technology and inclusive finance, mitigating financial exclusion in agricultural production. It fosters rural revitalization and the modernization of agriculture by bolstering farmers’ innovation, entrepreneurship, and agricultural technology advancements. Consequently, it significantly enhances overall agricultural total factor productivity. This study uses panel data from 2011 to 2020 to empirically investigate the impact and mechanism of digital inclusive finance on agricultural total factor productivity in Zhejiang Province, China. The research results show that digital inclusive finance significantly enhances agricultural total factor productivity in Zhejiang Province, which holds true even after a series of robustness tests. Analysis of the mechanism reveals that the integrated development of rural industries plays a crucial mediating role in empowering agricultural total factor productivity through digital inclusive finance. Furthermore, heterogeneity analysis indicates that the positive effect of digital inclusive finance on agricultural total factor productivity is more pronounced in the northeastern region of Zhejiang Province and in areas ranked in the second tier of agricultural development. Therefore, we recommend comprehensively enhancing the development of digital inclusive finance in rural areas, fostering a financial ecosystem that integrates rural industries, promoting the coordinated development of digital inclusive finance in different regions, and comprehensively improving agricultural total factor productivity.