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Does digital inclusive finance promote agricultural production for rural households in China? Research based on the Chinese family database (CFD)

Does digital inclusive finance promote agricultural production for rural households in China?... The development of digital inclusive finance appears to be able to solve the difficulty of traditional finance, which cannot completely cover agriculture and farmers and provides better financial services and products to Chinese farmers. Thus, it improves the farmers' enthusiasm for agricultural production. The purpose of this paper is to clarify whether this goal is indeed being achieved.Design/methodology/approachThis paper theoretically analyzes the mechanism that influences the effect of digital inclusive finance on rural households' agricultural production decisions and conducts an empirical study based on a sample from the Chinese family database (CFD).FindingsFirst, the development of digital financial inclusion in general can encourage rural households to reduce agricultural production. Second, the negative effect of digital inclusive finance on households' agricultural output is realized by widening the gap between the efficiency of non-agricultural economic activities and the efficiency of agricultural production. The wider the gap is, the lower the enthusiasm of households for agricultural production. Third, the mediating effect of “digital financial inclusion – difference in efficiency – agricultural output” has a significant negative effect on households with low agricultural production efficiency, but not households with high agricultural production efficiency. Digital inclusive finance has no significant effect on the difference in efficiency between the two economic activities of high-efficiency households, but a greater difference in efficiency between the two economic activities corresponds to higher enthusiasm of households for agricultural production.Originality/valueTo the best of our knowledge, this paper is the first to analyze the impact of digital financial inclusion on Chinese farmers' agricultural production. The findings of this study can provide policy-related insights to help local governments promote the development of digital finance in China's agricultural economy. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png China Agricultural Economic Review Emerald Publishing

Does digital inclusive finance promote agricultural production for rural households in China? Research based on the Chinese family database (CFD)

China Agricultural Economic Review , Volume 13 (2): 20 – Jun 1, 2021

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1756-137X
DOI
10.1108/caer-06-2020-0141
Publisher site
See Article on Publisher Site

Abstract

The development of digital inclusive finance appears to be able to solve the difficulty of traditional finance, which cannot completely cover agriculture and farmers and provides better financial services and products to Chinese farmers. Thus, it improves the farmers' enthusiasm for agricultural production. The purpose of this paper is to clarify whether this goal is indeed being achieved.Design/methodology/approachThis paper theoretically analyzes the mechanism that influences the effect of digital inclusive finance on rural households' agricultural production decisions and conducts an empirical study based on a sample from the Chinese family database (CFD).FindingsFirst, the development of digital financial inclusion in general can encourage rural households to reduce agricultural production. Second, the negative effect of digital inclusive finance on households' agricultural output is realized by widening the gap between the efficiency of non-agricultural economic activities and the efficiency of agricultural production. The wider the gap is, the lower the enthusiasm of households for agricultural production. Third, the mediating effect of “digital financial inclusion – difference in efficiency – agricultural output” has a significant negative effect on households with low agricultural production efficiency, but not households with high agricultural production efficiency. Digital inclusive finance has no significant effect on the difference in efficiency between the two economic activities of high-efficiency households, but a greater difference in efficiency between the two economic activities corresponds to higher enthusiasm of households for agricultural production.Originality/valueTo the best of our knowledge, this paper is the first to analyze the impact of digital financial inclusion on Chinese farmers' agricultural production. The findings of this study can provide policy-related insights to help local governments promote the development of digital finance in China's agricultural economy.

Journal

China Agricultural Economic ReviewEmerald Publishing

Published: Jun 1, 2021

Keywords: Digital inclusive finance; Rural families; Agricultural output; Production decision

References