Analysis of the Impact of Digital Inclusive Finance on the Development of Green Agriculture

Abstract

Agricultural green development plays a crucial role in addressing the conflict between agricultural production and ecological environmental protection. This study aims to analyze the impact and mechanisms through which digital inclusive finance influences agricultural green development, providing empirical evidence to support the role of digital inclusive finance in promoting sustainable agricultural practices. Using panel data from 30 provinces (cities and districts) in China spanning from 2011 to 2020, this study measures regional agricultural green development levels using the entropy power method. By clarifying the theoretical mechanisms behind the relationship between digital inclusive finance and agricultural green development, this research employs panel fixed effects, mediation effects, and threshold regression models to empirically examine the impact of digital inclusive finance, specifically its coverage breadth, usage depth, and digitization level, on agricultural green development. Furthermore, this study explores the threshold effects of digital inclusive finance on agricultural green development. The findings from this study indicate that digital inclusive finance significantly contributes to agricultural green development, with a double-threshold effect observed as follows: when digital inclusive finance surpasses critical thresholds, its impact on agricultural green development intensifies. This result remains robust after conducting a series of endogeneity and robustness tests. The mechanism analysis reveals that digital inclusive finance drives agricultural green development by fostering technological innovation and increasing farmers’ income. Heterogeneity analysis further demonstrates that digital inclusive finance has a substantial impact on agricultural green development in eastern China compared to the central and western regions. Consequently, this study suggests that digital inclusive financial services should be further expanded and deepened to foster the integration of financial services with agriculture, creating a sustainable development model that promotes shared prosperity and effectively supports the green development of agriculture.