Analysis on the Next Generation of Artificial Intelligence Development Plan and Digital Financial Inclusion: Evidence from China

Abstract

Abstract In 2017, the State Council of China released the Next Generation Artificial Intelligence Development Plan in order to seize the opportunity to develop artificial intelligence. Based on a panel dataset from 31 regions in China from 2014-2019, this study utilizes a difference-in-difference model to examine the impact of the release of the Next Generation of Artificial Intelligence Development Plan on the development of digital financial inclusion, and then utilizes a spatial difference-in-difference model to examine the spatial spillover effect of the release of the plan. In this study, results demonstrate that the release of the Next Generation of Artificial Intelligence Development Plan had a significant impact on the promotion of the development of digital financial inclusion, as indicated predominantly by the depth of its use and digitalization. Additionally, the spatial difference-in-difference analysis shows that the impact of this plan has a significant spatial spillover effect, which promotes the development of digital financial inclusion in the region, as well as increases the level of digital financial inclusion in the surrounding areas. The development of digital financial inclusion has been accompanied by a spatial agglomeration. JEL classification numbers: O25, O33, R58. Keywords: Artificial Intelligence, Digital Financial Inclusion, Difference-in-Difference Model, Spatial Difference-in-Difference Model, Spatial Spillover Effect.