🔑 Key Findings at a Glance
1.    Digital finance significantly promotes high-quality economic development. Cities with stronger digital finance ecosystems perform better in productivity, innovation, environmental outcomes, industrial upgrading, and residents’ well-being.
2. Financial development strengthens the impact of digital finance. Well-functioning financial systems amplify the ability of digital finance to support efficient resource allocation and sustainable growth.
3. Excessive government intervention weakens these gains. Over-intervention distorts market signals and dampens innovation, reducing the effectiveness of digital finance.
4. Strong regional heterogeneity. The effects are more pronounced in eastern and second-tier cities, highlighting the importance of tailored, region-specific policy design rather than one-size-fits-all solutions.
5. Usage depth matters more than access alone. Intensive and effective use of digital financial services delivers greater real-economy benefits than coverage expansion by itself.
6. Policy-driven digital finance reforms work. Difference-in-Differences and instrumental-variable evidence confirms that China’s digital finance initiatives causally boosted high-quality economic development.

📌 Key takeaway:
Digital finance can be a powerful driver of sustainable and inclusive growth but only when supported by strong financial institutions, market-friendly governance, and carefully calibrated government involvement.

Wu, J., Liew, C. Y., & Ji, D. Y. (2026). Digital finance and high-quality economic development: Evidence from Chinese municipal data. Journal of Asian Economics, 103, 102136. doi:https://doi.org/10.1016/j.asieco.2026.102136

https://www.sciencedirect.com/science/article/abs/pii/S1049007826000230?via%3Dihub (50 days free access)

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