Rural households’ risky financial asset selection (RFAS) is the foundation of households’ diversified asset allocation, which in turn helps expand their sources of property income. However, rural households rarely participate in risky financial markets due to limited participation access and a lack of financial knowledge and market information. Digital Village Construction (DVC) has brought new opportunities for a change in this phenomenon. This study determines the impact of DVC on RFAS using data on 5593 rural households from the 2020 China Family Panel Studies and County Digital Village Index. The findings show that DVC significantly increases the likelihood, amount, and rate of rural households’ RFAS. However, the impact of DVC varies across its different dimensions. Specifically, the development of digital infrastructure, digital economy, and digital lifestyles each exerts a significant positive effect on RFAS, whereas digital governance does not show a statistically significant impact—likely due to the underdevelopment or inefficiencies of current digital governance platforms. Mechanism analyses reveal that DVC promotes rural households’ RFAS by improving farmers’ access to information and expanding their market participation opportunities, while rural households’ education expenditure and pension income uncertainties weaken this positive effect. Heterogeneity analyses suggest that the impact of DVC on rural households’ RFAS is more pronounced among young families, those with lower education levels, and high-income families. With the projected advancement of digital villages in China, this study offers crucial guidance for implementing policies, such as the Digital Village Construction Guidelines, by guiding rural households toward more rational and inclusive participation in risky financial markets.
Cheng et al. (Mon,) studied this question.