FinTech, Financial Inclusion, and Household Portfolio Choice: Evidence from China Household Finance Survey

Based on the China Household Finance Survey in 2017, using different measurements of FinTech, this paper finds that FinTech can promote the ratio of household risky asset holdings significantly. However, this positive effect is not financially inclusive, since it is more obvious among urban households, high-income households and households headed by younger. In terms of mechanism analysis, this paper finds that FinTech increases the ratio of household risky asset holdings through three ways: improving financial literacy, lowering the investment threshold, and promoting social interaction. Further, this paper finds that the reason why FinTech is not financial inclusive is that rural households, low-income households, and households headed by older are not good at using FinTech to improve financial literacy and lower their investment threshold. Our conclusion is still robust after using the average residential electricity consumption as the instrumental variable. This paper enriches the research on household portfolio choice and provides policy suggestions for the future promotion of financial inclusion with FinTech.