Impact of Digital Inclusive Finance on Rural High-Quality Development: Evidence from China

Digital inclusive finance not only reduces the threshold of rural financial services but also plays an important role in promoting the rural economy. Under the background of the digital economy in China, we studied how digital inclusive finance affects the high-quality development of the rural economy. For this purpose, we assembled the provincial panel data from 2009 to 2018 and constructed an index system of rural high-quality development and then calculated its index using the entropy weight method. FE regression model and RE regression model were employed for empirical analysis, and we constructed a nonlinear regression model to investigate the nonlinear relationship as well. Furthermore, systematic GMM and iterative GMM were used to solve the endogenous problem. We found that digital inclusive finance plays a significant and positive role in promoting rural high-quality development, mainly through the channel of economic efficiency, urban and rural structure, green ecological development, harmony of people's livelihood, and innovative development potential. Each subdimension of digital inclusive finance has a positive impact on rural high-quality development to different degrees. There is also a direct nonlinear relationship between the core variables, which act as a disincentive in the initial stage and boost after reaching a certain inflection point. Therefore, it is recommended to increase the construction of rural digital infrastructure, improve the digitalization of inclusive finance with the help of digital technologies such as cloud computing, and expand the breadth and depth of digital inclusive finance services in rural areas, especially in economically underdeveloped provinces and cities, to effectively promote the comprehensive and high-quality development of rural areas.