The Impact of Digital Inclusive Finance Development on the Consumption Gap between Urban and Rural Residents in Shandong Province

Abstract

Since the reform and opening up, stimulating resident consumption has become one of the important engines of China's economic development. Especially since the Sino-US trade war and the outbreak of the pandemic, the importance of consumption in the national economic development has further increased. The country has also successively proposed the strategy of domestic and international dual circulation and the establishment of a national unified large market to further expand domestic demand. Shandong Province, with its large population and natural resources, has been one of the top three economic provinces in China for many consecutive years, making significant contributions to the national economy. In recent years, with the growth of Shandong's economy, its digital inclusive finance has also made significant progress. This paper, through the search and summarization of relevant literature, conducts a more in-depth and comprehensive exploration of the development status of digital inclusive finance in Shandong Province and the current status of the consumption gap between urban and rural residents in Shandong Province. Using both qualitative and quantitative methods, it studies the development of digital inclusive finance in Shandong Province and its relationship with the urban-rural consumption gap. Empirical analysis is conducted using data from 14 cities in Shandong Province from 2011 to 2020, and the regression results are analyzed. The results show that the development of digital inclusive finance in Shandong Province can promote resident consumption in the region, reduce the consumption gap and income gap between urban and rural residents in Shandong Province, and thereby promote balanced development in the region.