Research on the Impact of Digital Financial Literacy on Household Financial Portfolio Allocation Efficiency
Main Article Content
Keywords
digital financial literacy, household financial portfolio allocation efficiency, financial accessibility, social interaction
Abstract
Against the backdrop of the burgeoning digital economy, this paper investigates the impact of residents’ digital financial literacy on the efficiency of household financial asset allocation and its underlying mechanisms. Using micro-survey data from the China Household Finance Survey (CHFS) for 2017 and 2019, we conduct an empirical test. The findings reveal that an improvement in digital financial literacy significantly enhances the efficiency of household financial asset allocation. This effect is achieved by increasing household financial accessibility and promoting social interaction. Moreover, these results remain robust and significant after replacing the measurement indicators of the explanatory variable and accounting for potential policy interference. The heterogeneity analysis indicates that the positive effect of digital financial literacy is larger for rural households, those in non-key urban agglomerations, and non-financially vulnerable households. This study holds significant implications for enhancing the digital financial literacy of residents in China and promoting the rationalization of household financial asset allocation.
References
- [1] Prasad H; Meghwal D; Dayama V. (2018). Digital financial literacy: a study of households of udaipur. Journal of Business and Management, 523–532.
- [2] Tony N; Desai K. (2020). Impact of digital financial literacy on digital financial inclusion. International Journal of Scientific and Technology Research, 9(1), 1911–1915.
- [3] Morgan P.J; Huang B; Trinh L.Q. (2019). The need to promote digital financial literacy for the digital age. In Realizing Education for All in the Digital Age,T20 Report, 40－46．
- [4] Wu W.X; Wu K; Zhang X.Y. (2018). Financial literacy and household portfolio effectiveness. Journal of International Financial Studies, (5), 66–75.
- [5] Wu W.X; Qiu Y.C; Zhang L.W. (2015). Effectiveness of Chinese household investment portfolios: based on the Sharpe ratio. The World Economy, 38(1), 154–172.
- [6] Pelizzon L; Weber G. (2009). Efficient portfolios when housing needs change over the life cycle. Journal of Banking and Finance, 33(11), 2110–2121.
- [7] Zang X.H; Dong J.X. (2023). Can social pension insurance improve the effectiveness of household portfolios?—a study from the life-cycle perspective. Research on Economics and Management, 44(10), 33–53.
- [8] Van R.M; Lusardi A; Alessie R. (2011). Financial literacy and stock market participation. Journal of Financial Economics, 101(2), 449–472.
- [9] Wu Y; Li X; Li J, et al. (2021). Digital financial development and household financial portfolio effectiveness. Management World, 37(7), 92–104+7.
- [10] Wu W.X; Zhang X.Y; Wu K. (2021). Financial literacy and household saving rate: an explanation based on financial planning and borrowing constraints. Journal of Financial Research, (8), 119–137.
- [11] Zhou G.S; Liang Q. (2018). Internet use, market frictions, and household risky financial ssset investment. Journal of Financial Research, (1), 84–101.
- [12] Wang X.H; Zhao Y.X. (2022). Digital financial development and the Urban-Rural disparity in household financial accessibility. Chinese Rural Economy, (1):44–60.
- [13] Liu S.J; Guan F.Q. (2024) .Impact of digital financial literacy on financial asset allocation of rural households: from the perspective of financial availability. Wuhan Finance, (6), 57–64.
- [14] Wang X.H; Liu Y; Song M. (2023). Digital capability and household risky financial asset allocation. Chinese Rural Economy, (11), 102–121.
- [15] Si C.N; Zhang X.F. (2024). Digital financial literacy and household economic resilience—an analysis based on CHFS microdata. Modern Finance and Economics (Journal of Tianjin University of Finance and Economics), (12), 52–67.
- [16] Jiang T; Li W; Sun W, et al. (2024). Digital financial inclusion and diversity of household financial asset allocation: evidence from China. Australian Economic Papers, 64(2), 205–220.
- [17] Chai S.J; Yang C; Lim Y.K. (2025). Digital divide and household portfolio investment efficiency: evidence from China. Emerging Markets Review, 70, 101407.
- [18] Calcagno R; Monticone C. (2015). Financial literacy and the demand for financial advice. Journal of Banking and Finance, 50, 363–380.
- [19] Li J; Alexis M. (2019). Promoting financial literacy through a digital platform: a pilot study in Luxembourg. International Journal of Finance & Economics, 26(1), 73–87.
- [20] Chai S.J. (2017). Social capital and household portfolio effectiveness. China Economic Issues,(4), 27–39.
- [21] Fu Q; Ma L.X; Hu J.L. (2022). Impact of social capital on financial asset allocation of rural households. Economic Review, (7), 118–128.
- [22] Liu C; Zhang Y.R; Li G.C. (2025). Digital financial capability and household wealth accumulation: evidence from the China Household Finance Survey. Journal of Econometrics, 5(2), 442–462.
- [23] Zhu W.P; Lin Y. (2022). Financial literacy, financial inclusion, and pension financial asset allocation. Journal of Shanxi University of Finance and Economics, 44(3), 43–57.
- [24] Ji, Y.L; Li, J.Y; Zhao H. (2022). Digital infrastructure construction and tourism economic growth: a mechanism test based on mediating and moderating effects. On Economic Problems, (7), 112–121.
- [25] Wang X.H; Li X.R; Song M, et al. (2024). Digital finance, digital divide, and household financial portfolio effectiveness: an analysis from the perspective of Urban-Rural disparity. Contemporary Economic Science, 46(2), 45–58.
- [26] Li B; Zhu T.H. (2022). Debt leverage, financial fragility, and heterogeneous household consumption behavior. Journal of Financial Research, (3), 20–40.
Article Sidebar
This work is licensed under a Creative Commons Attribution 4.0 International License.