Inclusive Financing’s Development and Urban-rural Income Gap—Empirical analysis based on provincial panel data

Abstract

With the further development of China’s economy, the income of urban and rural residents has increased. At present, China’s economy has changed from a stage of high-speed growth to a stage of high-quality development. However, uneven and insufficient regional development is still a problem that requires great attention. Inclusive Financing’s development provides residents with more access to financial services and is one of the important ways to build a well-off society and develop the economy in recent years. Based on the Peking University Digital Inclusive Financing Index, this paper studies the relationship between the development level of Inclusive Financing and the income gap between urban and rural residents by constructing panel data of 31 provinces, cities and regions in China and establishing a model for empirical analysis. The study found that the development of Inclusive Financing has a significant impact on the income gap between urban and rural areas, among which the improvement of the level of Inclusive Financing in the economically developed eastern region has a very obvious effect on narrowing the income gap between urban and rural areas. However, blindly developing Inclusive Financing in the underdeveloped central and western regions will also cause the further widening of the income gap between urban and rural areas. The conclusion of this paper has certain positive significance for narrowing the income gap between urban and rural areas and promoting the development of Inclusive Financing.