Unleashing the digital dividend: Exploring how the digital economy promotes the construction of new urbanization in China’s 284 prefecture-level cities?

In a “digital” era, developing the digital economy has become a key stepping stone for advancing new urbanization and common prosperity. This study explores the dynamic evolution characteristics of digital economy and new urbanization from the temporal-spatial dimensions through kernel density estimation (KDE). Spatial autocorrelation analysis and panel data spatial Durbin model (SDM) were used to empirically test the impact process, transmission path and spatial spillover effect of digital economy on new urbanization. In addition, the study further used the spatial distance threshold method and spatial difference-in-differences (SDID) to conduct detailed empirical tests on the heterogeneity of multi-distance thresholds, regional heterogeneity and robustness of the results of impact of digital economy on new urbanization. The study found that: (1) Digital economy and new urbanization both displayed a general growth tendency from 2011 to 2019, but both had significant temporal-spatial differences. (2) The improvement of digital economy not only supported local new urbanization efforts, but also generated positive spatial spillover effects on new urbanization in neighboring regions. (3) The spatial spillover of digital economy exhibited boundary and geographical attenuation characteristics effects on new urbanization, with spillover peaking at 800 km and attenuation reaching its limit at 1800km. (4) For regional heterogeneity, eastern region and urban agglomeration were more sufficient for the release of dividend and spillover spread of digital economy development. Technological innovation and industrial structure optimization were identified as crucial paths for transmission mechanism through which digital economy promote the construction of new urbanization. Therefore, to achieve regional coordination and common prosperity and further enhance spillover effects, efforts be made to integrate the digital economy with new urbanization, especially in central and western regions and non-central cities.