How does digital finance impact the leverage of Chinese households?

ABSTRACT

In this article, digital inclusive finance positively determines the debt ratio of Chinese households. Through mechanism analysis, we clarify that digital inclusive finance affects household debt ratio by increasing household consumption and relaxing liquidity constraints. Further analysis suggests that digital inclusive finance inhibits household over-indebtedness. These findings imply the tradeoff between deleverage and over-indebtedness of Chinese household sector.

KEYWORDS:

• Digital inclusive finance
• household leverage
• liquidity constraints
• over-indebtedness

JEL CLASSIFICATION:

• D12
• D14
• G00

Disclosure statement

No potential conflict of interest was reported by the authors.