Digital economy and economic competitive pressure on local governments: Evidence from China

Yongming Miao, Yaokuang Li and Yanrui Wu

Economic Modelling, 2024, vol. 140, issue C

Abstract: For decades, fiscal decentralization and gross domestic product growth targeting have resulted in fierce economic competition among local governments in China, putting tremendous economic competitive pressure on them. The latter has serious social and economic implications and is a major issue for policymakers. This study analyzes data from China's 30 provinces for 2011–2021. It demonstrates that digital economic development could considerably reduce economic, competitive pressure on local governments, with trade openness and entrepreneurial dynamism serving as impact mechanisms. This study also found that the alleviating effects are more pronounced in regions with a poor innovation environment, a less developed economy, or lagging human resources. These findings emphasize the important role of the digital economy in increasing regional competitiveness and reducing regional disparities.

Keywords: Digital economy; Economic competition; Trade openness; Entrepreneurial dynamism; China (search for similar items in EconPapers)
JEL-codes: O33 P25 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:140:y:2024:i:c:s0264999324002165

DOI: 10.1016/j.econmod.2024.106859

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