Can the Digital Economy Really Narrow the Innovation Efficiency Gap Among Cities in China?—A Study from the Perspective of Triple Networks

Zhuo Huang, Lin Tang, Xiang Chen () and Jian Han
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Zhuo Huang: Business School, Soochow University, Suzhou 215021, China
Lin Tang: Business School, Soochow University, Suzhou 215021, China
Xiang Chen: Business School, Soochow University, Suzhou 215021, China
Jian Han: Business School, Soochow University, Suzhou 215021, China

Sustainability, 2025, vol. 17, issue 9, 1-33

Abstract: This study investigates how the digital economy empowers urban network intensity to address the dilemma of “low-efficiency lock-in” and to promote high-quality and balanced innovation development. Based on panel data from 264 prefecture-level and above cities in China from 2011 to 2022, the study adopts a multi-network perspective—covering innovation, information, and economic networks—and employs fixed effects and two-stage models to examine the impact and underlying mechanisms of the digital economy on disparities in urban innovation efficiency. The results reveal that the digital economy significantly reduces the gap in innovation efficiency across cities, primarily through the optimization of innovation networks and the strengthening of information networks. Moreover, the economic network positively moderates this relationship, amplifying the digital economy’s narrowing effect on innovation disparities. Threshold model tests indicate a nonlinear influence of the digital economy, showing an initial widening followed by a reduction in innovation efficiency gaps as innovation, information, and economic networks evolve. Heterogeneity analysis suggests that among the various dimensions of the digital economy, only digital industrialization plays a significant role in reducing efficiency disparities, while digital governance, digital infrastructure, industrial digitalization, and data valorization do not yet show statistically significant effects. Furthermore, the digital economy significantly reduces innovation efficiency gaps in southern cities, in regions southeast of the Hu Line, and in large cities, whereas in cities northwest of the Hu Line, digital economy development tends to exacerbate these disparities. This study provides both theoretical support for the coordinated improvement of innovation efficiency driven by the digital economy and practical implications for lagging cities aiming to leverage network effects to catch up in innovation performance.

Keywords: digital economy; innovation efficiency gap; urban network; threshold model (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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