The impact of digital technology use on farmers’ credit behavior: empirical evidence from China

Farmers’ credit is an important financial tool to promote agricultural development, farmers’ income and rural prosperity. This study utilizes 2018 China Family Panel Studies (CFPS) data. It applies a binary Logit model and a mediation effect model to analyze the impact of digital technology usage on farmers’ credit behavior. The results show that digital technology use can significantly increase farmers’ formal and informal credit availability, and the results still hold after robustness and endogeneity tests. Further analysis reveals that the intensity (duration) and depth (in learning, social interaction, and commercial activities) of digital technology usage can increase farmers’ probability of accessing formal and informal credit. Heterogeneity analysis shows that the use of digital technologies has a more significant promoting effect on formal and informal credit for young and middle-aged farmers, and a more prominent promoting effect on formal credit for farmers with low educational levels and those in central and western regions. Mechanism analysis shows that both bonding social capital and bridging social capital play an intermediary role in the impact of the use of digital technologies on farmers’ formal and informal credit behaviors. Based on the findings, we suggest that the government should improve farmers’ credit availability through measures such as improving information infrastructure, carrying out public welfare-oriented financial knowledge training, and rural cultural and recreational activities.