Regional Culture and Digital Financial Inclusion in China

Unbalanced development among regions is a prominent feature of the current situation of inclusive finance. Few works have been done on how regional culture affects the imbalance of inclusive financial development. The authors try to investigate this issue using yearly data of digital financial inclusion in China spanning from 2011 to 2020 and the Hofstede regional culture of China. The results reveal regional culture could be the potential driver which leads to regional imbalance of the development of digital financial inclusion in China. Specifically, under Chinese historical culture background, financial inclusion is positively related with indulgence regionally, while individualism or power distance could exert negative impact. The findings are verified by a two-stage least square approach. Due to the anonymity and platform dependence of digital financial, Hofstede culture could make sense by influencing public trust in the financial sector, the internet, and unfamiliar relationships.