Digital Finance and Household Portfolio Efficiency

Existing studies mainly discuss the possibility of household participation in the financial markets from such micro-perspectives of household demographic characteristics as social capital, housing assets, etc. This paper aims to explore whether digital finance exerts an impact on household participation in risky financial markets. The results show that digital finance significantly promotes the probability of household participation. Moreover, the mechanism analysis reveals that the digital finance development significantly reduces the lack of investment access, promotes households' access to financial information and increases the possibility of household risk appetite. Furthermore, the results also show that the risk-taking level of households in rural and urban areas is significantly higher than that in urban areas. The findings provide an empirical basis for the mainstream positioning of digital finance in the development of inclusive finance, and display its positive impact on social welfare. It provides a reference for policymakers and decision-makers to improve regulation and control risks to eliminate online fraud and protect households' legal interests.