This dissertation comprises three chapters in International Macroeconomics and Digital Finance. The first essay focuses on the importance of digital financial literacy (DFL) in enhancing household financial behaviors and well-being. Based on a representative sample from a fintech platform in China, and a quasi-experiment design, I document that DFL significantly increases households’ stock market participation and improves their investment behaviors, and risk tolerance. Apart from these immediate impacts, DFL has a persistent effect on investors’ financial behaviors, enabling them to become more knowledgeable and astute in the long run. The second essay explores the intricacies of sovereign debts in the Global Landscape, examining the relationship between public debt and corporate investment. Firm-level regressions show that government debt increases the sensitivity of corporate investment to cash flow, indicating that the relationship between public debt and investment is likely to be causal and that public debt crowds out corporate investment by tightening credit constraints. The third essay investigates the impact of the sovereign debt inflows on Chinese firms, exploiting the announcement of China’s inclusion into the J.P. Morgan Government Bond Index Emerging Markets (GBI-EM). Drawing on the event study approach and high-frequency data, this essay shows that sovereign debt inflow shocks significantly reduce the local currency sovereign bond yields and appreciate the domestic currency, and further heterogeneously affect H-share listed firms. Collectively, this research offers valuable insights for policymakers, financial institutions, and households alike, with implications for enhancing financial stability, resilience, and inclusivity in an increasingly interconnected global economy.