Inclusive Finance, Environmental Regulation, and Public Health in China: Lessons for the COVID-19 Pandemic

The slow-down of the Chinese economy and the depression in the global economy during the COVID-19 show that governments should provide stimulus packages. These policies should be inclusive in terms of financial gains. Using the panel data of 30 regions in China from 2006 to 2016, this paper uses the Poisson Pseudo-Maximum Likelihood (PPML) estimator to analyze the impact of inclusive finance on public health. The results show that inclusive finance has a significant positive effect on public health. The performance of the eastern region is significantly better than that of the central and western regions. When we consider the combined effect of environmental regulation, the improvement effect of inclusive finance on public health is still significant, and the coefficient increases in the eastern region. Similarly, there is also a significant improvement effect in the central and western regions. Our findings reveal that environmental regulation promotes the beneficial effect of inclusive finance. Therefore, it is important to improve the inclusive financial development mechanism and enhance environmental regulation intensity for solving public health issues. Lessons related to the COVID-19 pandemic are also discussed.