The Impact of Digital Divide on Household Participation in Risky Financial Investments: Evidence From China

Abstract

The digital divide has now become a worldwide problem and has the potential to lead to greater inequality. This paper empirically analyses the impact of the “digital access divide”, “digital use divide” and “digital inequality divide” on household participation in risky financial investments using micro data from China. The results show that all three digital divides have a positive and significant impact on the probability of households participating in risky financial investments; in addition, the digital divide between urban and rural areas and between households is also significant. Finally, the authors propose strategies for bridging the digital divide based on China’s national context, such as building a national cultivation and evaluation system of digital literacy, reducing the family’s parenting burden, improving the investment environment for residents, developing the power resources of the younger elderly, and promoting intergenerational digital feedbacks.