How digital finance affects income distribution: Evidence from 280 cities in China

PLoS One. 2022 May 18;17(5):e0267486. doi: 10.1371/journal.pone.0267486. eCollection 2022.

Abstract

This paper empirically tests the relationship between digital finance and income distribution of residents in 280 cities in China from 2011 to 2020 using linear and nonlinear models, respectively. Based on the Greenwood-Jovanovic (G-J) theory of output grow, the empirical study shows that there is a Kuznets effect of digital finance development on the income distribution of Chinese residents, and most regions have not yet crossed the inflection point of the bell-shaped curve, and the income gap within regions will continue to increase with the development of digital finance. Furthermore, the threshold model test shows that the positive effect of digital finance on the income disparity of residents may initially increase with the increase of regional economic level. However, when the regional economic development reaches a higher stage, the negative effect of digital finance development on the income distribution of residents will be significantly reduced.

Publication types

  • Research Support, Non-U.S. Gov't

MeSH terms

  • China
  • Cities
  • Economic Development*
  • Income*
  • Nonlinear Dynamics

Grants and funding

This project was supported by the “Outstanding Youth Training Program” of Jiangsu Vocational Institute of Commerce, as well as the General Project of Philosophy and Social Science Research in Jiangsu Universities in 2022: “Research on Credit Evaluation of Small and Micro Enterprises in Counties from the Perspective of Digital Inclusive Finance,” through grants awarded to JY.