<span style="mso-fareast-font-family: SimSun; mso-fareast-language: ZH-CN;">A Study on the Impact of Financialization of the Economy and the Income Gap between Urban and Rural Residents: Evidence from China<span style="mso-bidi-font-size: 10.5pt;">

The financialization of the economy is the process of industrial capital moving towards monetization and virtualization, appropriating the value of workers and enriching the capital stock of the rich class through the financial cycle, resulting in income differentiation. This paper uses China's provincial data from 2003 to 2022 to comprehensively evaluate the degree of financialization of the economy and examine its impact on the income gap between urban and rural residents, and finds that: financialization of the economy has curbed the convergence of the income gap between urban and rural residents, and regional heterogeneity is obvious, while expanding the wage income gap and contracting the property income gap; the income gap between urban and rural residents is related to the degree of financialization of the economy in the region, and is also affected by the spillover effect of neighboring regions, called "Club Convergence" Effect. Considering the development of financialization of the economy from a multi-dimensional perspective, relying on the policy-based financial system, deepening inclusive financial services in the countryside, and giving full play to regional advantages will alleviate the income imbalance between urban and rural areas, and benefit people's livelihoods and well-being.