Work

Evaluating the effects of digital finance on urban poverty

Year: 2024

Type: article

Abstract: This study examines the impact of digital financial services development on urban poverty. Utilizing the vicious cycle of poverty theory, we established a multidimensional poverty measurement index to assess the poverty status of urban households and propose strategies for leveraging digital finance to address urban poverty. Through empirical research based on a comprehensive dataset from China covering the period from 2012 to 2020, we evaluated the moderating effect of digital financial growth on urban poverty. Our analysis, which categorized poor urban households into five groups—laid-off workers, unemployed individuals, migrants, the elderly, and disabled persons—revealed that only the unemployed and migrants experience significant benefits from digital financial development. Lastly, we explore the underlying mechanisms and emphasize the role of investment, financing, and entrepreneurship in utilizing digital finance for poverty alleviation. • We created a multidimensional indicator system to identify urban poor households from the vicious cycle of poverty theory. • Developed two instrumental variables to clarify the causal link between digital finance and urban poverty. • Categorized urban poverty groups based on their context and concepts. • Digital finance aids in reducing multidimensional urban poverty, offering strategies for other developing nations.

Source: Socio-Economic Planning Sciences

DOI: 10.1016/j.seps.2024.102099

Authors: Zhimin Duan, Fangjie Yuan, Zhengjie Tian

Institutions: Tianjin University of Finance and Economics, Shandong University of Finance and Economics

Language: English

Topic: Microfinance and Financial Inclusion

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: No poverty, Reduced inequalities, Sustainable cities and communities, Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,020