Investment-driven Effects of Digital Inclusive Finance: Theory and Empirical Evidence

Against the background of rapid development of digital economy and transformation and upgrading of economic structure, digital inclusive finance, as a new mode of fusion of financial technology and inclusive finance, is of great significance in promoting investment growth. This paper empirically investigates the impact of digital financial inclusion on investment and its mechanism of action based on panel data of 30 provinces in China from 2011 to 2022. The study finds that: first, digital inclusive finance has a significant role in promoting investment. Second, the investment-driving effect of digital financial inclusion shows regional heterogeneity, with a decreasing impact on the eastern, central and western regions, reflecting the differences in the level of digital financial inclusion between regions. Third, financial regulation and financial marketization have negative and positive moderating effects on the investment effect of digital inclusive finance, respectively, and over-regulation may inhibit innovation vitality, while market-oriented reforms can strengthen its positive impact. Based on this, this paper proposes that digital inclusive finance should be comprehensively promoted, regional differentiation policies should be optimized, financial regulation and innovation should be balanced, and market-oriented reforms should be deepened in order to give full play to the supportive role of digital finance to the real economy.