The Effect of Digitization on Economic Sustainable Growth in Shandong Province of China

Ran Xu, Yeong-Gil Kim and Chenglei Liang ()
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Ran Xu: Dongfang College, Shandong University of Finance and Economics, Taian 271000, China
Yeong-Gil Kim: College of Business, Shinhan University, Uijeongbu-si 11644, Republic of Korea
Chenglei Liang: Dongfang College, Shandong University of Finance and Economics, Taian 271000, China

Sustainability, 2024, vol. 16, issue 16, 1-21

Abstract: In recent years, the digital economy has emerged as a widely debated economic topic, with China experiencing rapid development in this sector. As a pioneering region and microcosm of China’s economy, studying the impact of Shandong’s digitization level on economic development holds significant academic and practical importance. Based on the annual panel data for the 17 cities of Shandong Province from 2001 to 2019, a digitization index (DI) is generated through the entropy weight method (EWM). Then, the effects of DI on GDP and total factor productivity (TFP) are empirically analyzed through various regression models, including fixed effect and spatial regression techniques. Results indicate that: (1) DI has a direct effect on TFP and an indirect effect on GDP; (2) regional differences are significant but minimal, with most concentrated effects being relatively large in recent periods; (3) negative spatial spillovers in both GDP and TFP are caused by negative spillovers in DI. It is recommended that local governments carefully consider the negative spillover effects of digital development when formulating digitization policies. While concentrating resources on advancing digitization in high-priority cities, equal emphasis should be placed on promoting the dissemination of digital products and services to surrounding areas. This approach is crucial for mitigating the risk of regional economic disparities caused by the potential siphoning effect of digital development.

Keywords: digitization; sustainable growth; total factor productivity; Spatial Durbin Model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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