How can digital financial inclusion crack the urban–rural income gap? New insights from China

Introduction The urban-rural income gap is a significant challenge faced by countries worldwide. In recent years, inclusive finance, emerging alongside the development of the digital economy, has provided a new pathway to mitigate this gap due to its inclusive and accessible nature. Methods Based on panel data from 1,081 county-level regions in China spanning 2014–2022, this study employs a double machine learning model to empirically examine the impact of digital inclusive finance (DIF) on the urban-rural income gap and its underlying mechanism. Results The results indicate that DIF significantly narrows the urban-rural income gap, and this conclusion remains valid after a series of robustness tests. Further mechanism analysis reveals that DIF alleviates the urban-rural income gap primarily by enhancing county-level entrepreneurial activity and technological innovation levels, with government fixed-asset investment playing a significant positive moderating role in this process. Heterogeneity analysis shows that the gap-narrowing effect of digital inclusive finance varies significantly across counties with different resource endowments, geographical locations, and economic agglomeration degrees. Discussion This study provides theoretical and empirical references for promoting urban-rural integrated development and achieving sustainable development goals (SDGs).