Digital financial inclusion and the urban–rural income gap in China: empirical research based on the Theil index

Abstract

This study examined the effect of digital financial inclusion in reducing the urban–rural income inequality in China. Based on city-level panel data, the results showed that digital financial inclusion narrowed the urban–rural income gap significantly by boosting economic growth. The results were robust when the core explained variables were replaced. Heterogeneity analysis showed that digital financial inclusion indicates regional differences in narrowing the urban–rural income gap. This study puts forward corresponding countermeasures for the development of digital financial inclusion and adds to the research on this very topical subject.