The impact of digital inclusive finance on regional capital aggregation

Capital flow and aggregation are pivotal to regional coordinated development, and the innovations within the financial industry have introduced significant changes. This study examines the potential impact of digital inclusive finance on regional capital aggregation. By analyzing city data from China between 2011 and 2020, we find that the development of digital inclusive finance exhibits an inverted U-shaped effect on regional capital aggregation. During the initial stages of digital inclusive finance development, it promotes regional capital aggregation; however, beyond a certain threshold, there is a fostering of capital outflow. The impact mechanism reveals that digital inclusive finance exerts a nonlinear effect on the efficiency of regional capital allocation, thereby altering the regional capital aggregation level. Furthermore, enhancing human capital levels can accelerate this process, whereas increased government intervention may impede it. This study contributes to the theoretical research on factors influencing capital flow across regions and offers significant implications for utilizing digital inclusive finance to narrow the regional capital allocation gap and promote coordinated regional development.