Digital Finance and Financial Literacy: An Empirical Investigation of Chinese Households

30 Pages Posted: 18 Mar 2021

See all articles by Junhong Yang

Junhong Yang

affiliation not provided to SSRN

Yu Wu

Southwestern University of Finance and Economics (SWUFE)

Bihong Huang

Asian Development Bank

Date Written: December 25, 2020

Abstract

Using the 2015 and 2017 waves of the China Household Finance Survey, we measured financial literacy and study its relationship to households’ demand for digital finance. We found that a majority of households in the People’s Republic of China possess limited financial literacy. The low level of financial sophistication is responsible for the low usage of digital finance among Chinese households. Further, the positive impact of financial literacy on digital finance is more pronounced for wealthy, high-income, and young households, women, and households in urban and coastal areas. Our results are robust to using a variety of specifications and controlling for endogeneity, peer effects, cognition, and voluntary self-exclusion.

Keywords: financial literacy, digital finance, household finance, CHFS, People’s Republic of China

JEL Classification: D10, G11, D91, D83

Suggested Citation

Yang, Junhong and Wu, Yu and Huang, Bihong, Digital Finance and Financial Literacy: An Empirical Investigation of Chinese Households (December 25, 2020). ADBI Working Paper 1209, Available at SSRN: https://ssrn.com/abstract=3806419 or http://dx.doi.org/10.2139/ssrn.3806419

Junhong Yang (Contact Author)

affiliation not provided to SSRN

Yu Wu

Southwestern University of Finance and Economics (SWUFE) ( email )

55 Guanghuacun St,
Chengdu, Sichuan 610074
China

Bihong Huang

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
10
Abstract Views
79
PlumX Metrics