Digital financial inclusion and household consumption structure upgrading

Abstract Driven by the rapid advancement of digital technology, Digital Inclusive Finance (DIF) has emerged as a transformative force in the financial sector, reshaping consumption patterns and facilitating the upgrading of residents’ consumption structures. Utilizing panel data from 31 Chinese provinces spanning 2011 to 2022, this paper empirically investigates the impact of DIF on consumption structural shifts. The study explores the underlying mechanisms of this influence, focusing on income enhancement and service accessibility, while further evaluating the moderating role of digital infrastructure. Key findings reveal that DIF significantly fosters consumption structure upgrading by raising residents’ income levels and mitigating income inequality. This positive effect is more pronounced in regions with superior digital infrastructure, as well as among urban populations and residents in China’s eastern region. Based on these results, the paper suggests policy interventions centered on targeted infrastructure investment, income-boosting strategies, and region-specific development approaches. Furthermore, the findings highlight the need for enhanced regulatory frameworks to balance financial stability with inclusive growth. Ultimately, this research contributes to the theoretical convergence of digital finance and consumption economics while providing practical guidance for leveraging DIF to support high-quality economic development.