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Digital Finance, Liquidity Constraints, and Household Consumption ——An Empirical Analysis Based on the China Family Panel Studies (CFPS)
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| Title:
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Digital Finance, Liquidity Constraints, and Household Consumption ——An Empirical Analysis Based on the China Family Panel Studies (CFPS)
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| Author:
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邹 婉贞
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| co-Authors:
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| Conference presentation:
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2025 CES China Annual Conference, July 5-7, 2025
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| Abstract:
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Based on data from the China Family Panel Studies (CFPS) and the
China Digital Financial Inclusion Development Index, this paper empirically
demonstrates that the development of digital financial inclusion can significantly
increase the level of household consumption. From the perspective of financial
constraints, it demonstrates that digital financial inclusion primarily enhances
household consumption by easing liquidity limitations. The estimation results obtained
using the Bartik instrumental variable approach confirm that the findings are robust and
reliable. Subsequently, the results of sub-sample regressions for different levels of
human capital indicate that the promotion effect of digital finance on household
consumption is more pronounced for households with higher education. Finally, the
results of urban-rural heterogeneity analyses show that digital finance has a
significantly stronger effect on the consumption of urban households than that of rural
households, underscoring the urgency of preventing the further widening of the "digital
divide" .
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