The Impact of the Digital Economy on Regional Economic Development

Abstract

The rapid development of the digital economy has reshaped the way economic activities are organized and has increasingly influenced regional development patterns. In the process of China’s transition toward high-quality development, differences in regional development capacity remain a practical concern. This study constructs an indicator system to measure digital economy development and regional economic development, and examines their relationship using panel data from selected Chinese provinces and cities during 2016–2022. Fixed effects models, robustness tests, and heterogeneity analysis are applied to explore whether and how digital economy development affects regional economic performance. The empirical results show that digital economy development does have a positive and significant relationship with regional economic development. That said, the effects are not the same across all regions. The eastern region sees the strongest impact, the western region comes next, and the central region shows a relatively weaker effect. These differences, as it turns out, may have a lot to do with variations in economic foundations, digital infrastructure conditions, and regional digitalization capabilities. What the findings really suggest is this: if we want to achieve more coordinated regional development, it would be important to improve digital infrastructure, strengthen regional digital integration, and also take local development conditions into proper account.