How does digital inclusive finance affect economic resilience: Evidence from 285 cities in China

Digital inclusive finance can provide effective financial services to consumers and enterprises that are excluded from traditional finance, thereby improving the vitality and resilience of the economy. Using panel data from 285 Chinese cities from 2011 to 2020, this study explores the mechanism of the impact of digital inclusive finance on economic resilience. We also empirically test the direct effect of digital inclusive finance on economic resilience, the moderating effect of the market environment, and the transmission path of mediating variables. The study shows that improving the level of digital inclusive finance has a positive impact on economic resilience, which mainly stems from the deepening of the coverage breadth and use depth of digital inclusive finance and gradually increases over time. In the heterogeneity analysis, we find that the enhanced effect of digital inclusive finance on economic resilience is more significant in the central and eastern regions and in cities with larger economies in China. Further mechanism analysis reveals that the better the financial market environment and business environment are, the stronger the role of digital inclusion finance in promoting economic resilience. In addition, the increase in innovative technology and the growth of the consumption level are two important mediating variables for digital inclusive finance to actively contribute to economic resilience. •Improving the level of digital inclusive finance (DIF) has a positive impact on economic resilience.•The deepening of the coverage breadth and use depth of DIF has a greater effect on economic resilience.•The better the financial market environment and business environment are, the stronger the role of DIF in promoting economic resilience.•The innovative technology and the growth of the consumption level are two important mediating variables.