November 8, 2025

Research on the mechanism of the impact of digital finance on high-quality economic development: the perspective of factor allocation structure

Key Points

Digital finance significantly enhances economic development by influencing factor allocation structures, and more.
The study indicates that digital finance influences high-quality development overall, particularly through innovation capacity.
Analysis using threshold models over a decade in Chinese cities reveals strong direct effects of digital finance.
Findings support the need for policies that integrate digital finance with economic structural reforms for better outcomes.

Abstract

Purpose This paper investigates how digital finance (DF) influences high-quality development (HQD) in China. It aims to systematically assess the direct effects, non-linear threshold effects and transmission mechanisms. Design/methodology/approach The study uses a panel of Chinese cities (2011–2020) and employs multi-dimensional fixed-effects models, mediation-effect models and threshold models to examine DF’s impact on HQD. Findings First, DF exerts a robust and stable positive effect on regional HQD, Second, DF, coverage breadth (DF1), usage depth (DF2) and degree of digitalization (DF3) exhibit a marginally increasing positive impact on HQD, Third, the principal channels through which DF promotes HQD are factor allocation structure, industrial development level, innovation capacity and consumption level. Originality/value This study provides theoretical and empirical support for coordinated policy design linking DF, structural economic reforms and HQD.

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