AN EMPIRICAL STUDY ON THE IMPACT OF DIGITAL INCLUSIVE FINANCE ON THE URBAN–RURAL INCOME GAP ACROSS REGIONS

Abstract

Drawing on regional panel data, this study empirically investigates how digital inclusive finance affects the urban–rural income disparity and explores the pathways through which this influence operates. The findings indicate that digital inclusive finance exerts a significant narrowing effect on the urban–rural income gap, suggesting that digital financial services contribute meaningfully to overcoming conventional financial exclusion, reducing barriers to financial access, and optimizing the distribution of financial resources in rural communities. The mechanism analysis demonstrates that digital inclusive finance fosters income convergence between urban and rural populations primarily through two channels: enhancing financial accessibility and stimulating entrepreneurial activity in rural areas. Furthermore, regional heterogeneity analysis reveals that the income-equalizing effect of digital inclusive finance varies across geographic regions, with the central region exhibiting a comparatively more pronounced effect. The evidence presented in this study offers empirical support for advancing digital inclusive finance development, facilitating balanced income growth between urban and rural areas, and achieving shared prosperity.