Riding the terrain: Geographic influence on household adoption of digital finance

The geography of economics provides valuable insights into the interaction between human societies and the land, elucidating patterns of spatial organization, resource allocation, and corresponding economic activities. This study expands the human–land relationship to household livelihood strategy and analyzes the impact of geographic conditions on digital finance usage using the China Household Finance Survey. Employing terrain relief as a compressive regional topographic feature, the results show an inverted U-shaped relationship between local terrain relief and the adoption of digital finance services. Further, mechanism analysis indicates that terrain relief stimulates the likelihood of entrepreneurship, especially through small and medium-sized enterprises, for regions within a relatively lower terrain relief range. In addition, the inverted U-shape is flatter for households with abundant livelihood capital, while steeper in underdeveloped areas. The results are consistent even within the digital finance hub, “Jiang Zhe Hu” area, and the Peking University Digital Financial Inclusion Index of China is used as an alternative measure.