Digital finance and rural revitalization: Empirical test and mechanism discussion

Digital finance effectively promotes the all-round digital transformation of rural areas and provides new opportunities for rural revitalization. Based on the panel data of 31 provinces from 2011 to 2020, this study identifies the direct impact, underlying mechanism, threshold effect, and heterogeneous impact of digital finance on rural revitalization in China by using the dynamic system GMM. It is indicated that digital finance enables rural revitalization mainly by promoting technological innovation, stimulating entrepreneurial activity, improving marketability and accelerating the accumulation of human capital. In addition, digital finance has a non-linear relationship with rural revitalization, which is influenced by various mediating mechanisms. The heterogeneity results indicate that the breadth and degree of digital finance contribute to rural revitalization. Except for monetary funds and credit investigation, other types of digital finance are beneficial to rural revitalization. The impact of digital finance on the economic aspects of rural revitalization is more prominent. Digital finance exerts a positive impact on rural revitalization in eastern and central China. This study contributes to the effective utilization of the dividends of digital finance on rural revitalization, thereby consolidating the achievements of poverty eradication in China, and thus achieving the goal of common prosperity.