Spatial Correlation and Its Driving Reasons for Chinese Provincial Digital Finance

In this study, we examine the spatial correlation between China's regional digital financial development and its driving factors based on a network perspective and relational data. Based on the 2011-2020 digital financial inclusion index for 31 Chinese provinces (autonomous regions and municipalities directly under the central government), compiled by Peking University, and Pearson's correlation coefficient method and SNA method to analyze the data. Based on the quantitative analysis, Chinese provincial digital financial development shows a significant center (eastern provinces) - edge (central and western provinces)-unbalanced spatial distribution pattern. The correlation relationship and spillover effect of interprovincial digital financial development are prominent. It is important to note that there is a low degree of spatial correlation, no pronounced hierarchical structure or redundancy in the spatial spillover network, and a good degree of robustness in the spatial spillover network. In China, digital financial development mainly occurs in the developed coastal provinces along the east coast, while the central and western provinces are on the periphery of this development. Eastern provinces serve as intermediaries and centers for digital financial development, attracting the inflow of factors and resources from the central and western regions. All 31 provinces are divided into four different types of blocks, each with a different status and role in the spatial spillover network. Each block has its own functions and comparative advantages. The short geographical distance between the provinces, the large gap in economic development and informatization levels, the similarity in financial literacy and the small income gap are all conducive to facilitating digital finance spillovers from the provinces and narrowing the gap in digital finance development between the provinces. The findings may have a positive impact on the ability of policymakers to promote the harmonious development of digital finance at the provincial level in China. © (2024), (International Association of Engineers). All Rights Reserved.