| ID | 193756 |
| Title Proper | Digital wealth management and consumption |
| Other Title Information | Micro evidence from individual investments |
| Language | ENG |
| Author | Gong, Qiang |
| Summary / Abstract (Note) | With the rapid advancement of digital finance in China, accessing wealth management services through digital platforms has become considerably convenient. However, the potential impact of digital platform investments on residents' consumption remains a relatively unexplored question. This study addresses this gap by leveraging a unique dataset obtained from one of China's largest fintech companies, encompassing individual-level data on consumption and investment. Our findings indicate that engaging in digital platform investments can indeed stimulate residents' consumption. Importantly, participation in digital platform investment has an inclusive effect, with a more pronounced marginal impact on consumption among low-income residents and individuals residing in finance-underdeveloped cities. Additionally, the positive influence of digital platform investment on consumption primarily stems from two channels, the wealth effect resulting from investment returns and from investment diversification in a diverse range of wealth management products. The wealth effect is more pronounced among low-risk investments when risk diversification is limited, while more pronounced among high-risk investments when the portfolio is diversified. |
| `In' analytical Note | China Economic Review Vol. 81; Oct 2023: p.102022 |
| Journal Source | China Economic Review 2023-10 81 |
| Key Words | Digital wealth management ; Micro evidence from individual investments ; Digital finance in China |