Observational analysis shows that digital inclusive finance and rural e-commerce reduce the income gap in China, indicating the need for targeted investments.
Using a balanced provincial panel of 31 Chinese regions (2014–2022), this study examines how Digital Inclusive Finance (DIF) and Rural E-Commerce (RE) jointly shape the urban–rural income gap. Two-way fixed effects and instrumental-variable estimators mitigate confounding. Both DIF and RE are associated with narrower gaps, and the interaction term is negative and robust across specifications. Mechanism evidence indicates that the coupling operates through higher Agricultural Green Total Factor Productivity, expanded rural credit supply, and stronger entrepreneurship. Effects are larger in Central/Western provinces and are most pronounced when DIF’s usage-depth and digital-support components are salient. For policymakers and managers, the findings support bundled investments in digital rails, platform logistics, and e-commerce–linked credit, with priority to lagging regions and programs that deepen usage. Overall, the results provide a tractable systems approach to aligning finance and markets for inclusive rural transformation.
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Chengzhi Qiao (2025) studied this question.
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