A Study on the Spatial Effects of the Digital Economy on Regional Economic Growth in China

Yujie Shang, Hyukku Lee () and Jinghao Ma
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Yujie Shang: Department of East-Asia Studies, Graduate School, Pai Chai University, Daejeon 35337, Republic of Korea
Hyukku Lee: Department of East-Asia Studies, Graduate School, Pai Chai University, Daejeon 35337, Republic of Korea
Jinghao Ma: College of Economics & Management, Zhejiang University of Water Resources and Electric Power, Hangzhou 310018, China

Sustainability, 2025, vol. 17, issue 5, 1-21

Abstract: The burgeoning digital economy in China serves as a significant impetus for extensive economic growth across the nation. However, regional development within China remains imbalanced, and the issue of the digital divide cannot be overlooked. This paper is dedicated to examining the effect of the digital economy on the aggregate economic growth of China, along with a heterogeneity analysis. Using Chinese province-level data during the period of full entry into the mobile Internet era (2014–2022), this study first constructs a digital economic development index system. Using the entropy method, it calculates the digital economic index for 30 provinces in China during the 2014–2022 period. Subsequently, a panel regression model is utilized to explore how the digital economy impacts economic growth. Ultimately, the Durbin model gauges the digital economy’s spatial impact on economic expansion in China. The key findings are as follows: (1) The burgeoning digital economy in China has instigated substantial expansion of the national economy. However, its impact on economic growth gradually decreases from the eastern to the western regions. (2) China reveals a notable spatial relationship linking its digital economy and economic expansion. A distinct positive spatial relationship exists between the two. Additionally, the digital economy of China presents a positive spatial spillover effect regarding economic growth. The strongest manifestation of this effect is detected in the eastern region, trailed by the central region, and the western region displays the feeblest effect. Based on these findings, it is clear the digital economy plays a pivotal role in China’s economic growth. To expedite the high-quality development of the digital economy, the government could take additional steps. Specifically, it could enhance the construction of infrastructure related to the digital economy and increase investment in scientific and technological innovation resources. Enterprises can consider digital transformation to achieve the digital development of industries. In addition, considering the existence of the spatial spillover effect, the digital divide can be bridged and regional imbalances alleviated by enhancing coordinated regional development.

Keywords: digital economy; regional economic growth; panel regression model; spatial spillover effect; China (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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