Digital finance, stock market participation and asset allocation of Chinese households

ABSTRACT

In this paper, we analyse the relation between the development of digital inclusive finance (DIF) and household stock market participation, as well as asset allocation. Using the digital financial inclusion index developed by Peking University and data from the 2019 China Household Finance Survey, we find that DIF significantly facilitates the probability of stock market participation and the proportion of assets allocating to equities of Chinese households. We use an instrumental variable approach to alleviate the endogeneity problem and find that the benchmark findings remain robust.

KEYWORDS:

• Digital finance
• stock market participation
• asset allocation
• Chinese households

JEL CLASSIFICATION:

• D14
• E21

Disclosure statement

The authors declare no conflict of interest.

Data availability statement

The data used to support the findings of this study have not been made available because of the confidentiality agreement. But it can be applied for at: https://chfs.swufe.edu.cn.

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Additional information

Funding

This work is supported by the National Natural Science Foundation of China (No.72003155, No.72103213) and the Youth Fund for Humanities and Social Sciences Research of the Chinese Ministry of Education (No.21YJC790112).