Does Inclusive Digital Finance Foster Rural Household Entrepreneurship: Evidence From the China Family Panel Studies

ABSTRACT With an increasing number of home‐bound workers launching businesses in their hometowns, rural household entrepreneurship has become a crucial avenue for achieving the shared prosperity goal in China. This study utilised the China Family Panel Survey (CFPS) from two periods, 2018 and 2020, and correlated it with the digital inclusive finance index from the same years. The findings revealed that digital inclusive finance fosters entrepreneurial activities among rural households, with the depth of usage exerting the most significant influence on rural entrepreneurship and passing robustness tests. The household income gap serves as a key mechanism through which the depth of usage impacts rural entrepreneurship. Greater depth of digital inclusive finance usage mitigates income disparities in rural areas, thereby promoting rural household entrepreneurship. Additionally, this deeper usage of digital inclusive finance notably enhances the entrepreneurial prospects of rural households with weak social networks and those in the middle‐income bracket across central, western, and northeastern China. The inclusive nature of digital inclusive finance has been substantiated. Therefore, supporting self‐employment among rural households and expanding access to digital inclusive finance is a promising strategy for rural rejuvenation in China.