How does digital financial inclusion affect farmers' choice of agricultural mechanisation: evidence from China

Employing the 2014 and 2016 Digital Finance Inclusive Index of China and the China Labour-Force Dynamics Survey, this study explores the impact of the development of digital financial inclusion on farmers' selection regarding agricultural mechanisation. The results illuminate that the extended inclusive digital financial services can incentivize farmers to outsource agricultural machinery services. This shift is facilitated by non-agricultural employment and expansion of the agricultural machinery services market, which act as mediators between the provision of inclusive digital financial services and the utilisation of agricultural machinery services. Additionally, the study discerns variations in the influence of digital financial inclusion on farmers' decisions related to agricultural mechanisation based on the scale of their farmland. Specifically, the fostering of inclusive digital financial services exerts a significant impact primarily on small-scale farmers. Furthermore, it is noteworthy that the depth of farmers' adoption of digital financial inclusion plays a more substantial role in determining their inclination toward outsourcing agricultural machinery services than the breadth of its coverage.