DIGITAL FINANCE AND RURAL ENTREPRENEURSHIP: MECHANISMS AND EFFECTS—EVIDENCE FROM 1,846 COUNTIES

Abstract

ral entrepreneurship serves as a key driver for promoting high-quality development of rural industries and advancing comprehensive rural revitalization. Characterized by inclusivity, accessibility, low cost, and low barriers, digital finance addresses the limitations of traditional financial services in rural areas, providing enhanced financial support for entrepreneurial activities among returnees such as migrant workers, skilled individuals, university graduates, and entrepreneurs. Based on panel data from 1,846 county-level units in China spanning 2014–2022, this paper analyzes the impact of digital finance development on rural entrepreneurship. Empirical results demonstrate that: 1. Digital finance significantly promotes rural entrepreneurship through three mechanisms: enhancing agricultural mechanization and facilitating rural industrial upgrading. Human capital positively moderates this promotive effect. 2. Digital finance exhibits a significant positive impact on rural entrepreneurship in eastern and central regions, but an insignificant effect in western regions. 3.In-depth analysis of the mechanisms and effects through which digital finance fosters rural entrepreneurship can accelerate comprehensive rural revitalization, contribute to building China into an agricultural powerhouse, and provide robust support for advancing agricultural and rural modernization.