Can the integration of digital and real economies stimulate residents' consumption?

Fan Zhao, Ruirui Li, Ziyin Wu and Xue Ru

International Review of Financial Analysis, 2025, vol. 103, issue C

Abstract: Integration of digital and real economies creates high-quality supply, facilitates the expansion of domestic demand, and is an effective tool for stimulating economic vitality. Based on China's 2011–2022 panel data, this study utilized a coupled coordination model to assess the integration between the digital and real economies, and empirically investigated the impact of this integration on residents' consumption. Findings showed that integration outperforms stand-alone digital economy development, with industry and regional variations. Benchmark tests revealed that this integration significantly increases consumption by improving supply quality, stimulating demand. From a heterogeneity standpoint, the integration of digital and real economies has a more pronounced effect on residents' consumption in central regions and rural areas, effectively playing a role akin to “sending charcoal in snow.” And the digital-real economy integration in regions with high-technology market development levels and low housing prices has a greater impact on residents' consumption. Further analysis demonstrated that integration drives consumption through three channels: increased product diversity, higher income levels, and improved payment convenience. Moreover, it positively impacts consumption oriented toward survival, development, and enjoyment, facilitating the upgrade of consumption structures and the transformation of consumption patterns. The analysis also revealed that integration with the tertiary sector exerts a significantly stronger influence on consumption compared to integration with the primary and secondary sectors. These findings underscore the critical role of digital-real economy integration in reshaping consumption patterns.

Keywords: Digital economy; Real economy; Residents' consumption; Consumption structure (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:103:y:2025:i:c:s1057521925003473

DOI: 10.1016/j.irfa.2025.104260

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