IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i15p12086-d1212182.html
   My bibliography  Save this article

Impact of Digital Economy on Inter-Regional Trade: An Empirical Analysis in China

Author

Listed:
  • Meiling Li

    (Institute for Macroeconomy High-Quality Development of Xinjiang, Xinjiang University, Urumqi 830046, China
    School of Economics and Management, Xinjiang University, Urumqi 830046, China)

  • Lijie Zhang

    (Institute for Macroeconomy High-Quality Development of Xinjiang, Xinjiang University, Urumqi 830046, China
    School of Economics and Management, Xinjiang University, Urumqi 830046, China)

  • Zhuangzhuang Zhang

    (Xinjiang Uygur Autonomous Region Industrial Economics and Information Technology Research Institute, Urumqi 830002, China)

Abstract

Unimpeded domestic inter-regional trade is an inevitable choice for a country to improve its economic development autonomy and internal stability. The booming development of the digital economy profoundly affects inter-regional trade exchanges and the construction of domestic trade patterns. Based on China’s inter-provincial panel data, this study analyzes the mechanism channels and regional heterogeneity of the digital economy’s impact on inter-regional trade. We found that firstly, the digital economy significantly promotes inter-regional trade outflows and inflows with positive spatial spillover effects. Secondly, the digital economy promotes inter-regional trade by reducing trade costs and stimulating market demand, while the role of the resource allocation effect and technological innovation effect needs to be enhanced. Thirdly, the promotion of inter-regional trade by the digital economy is more prominent and has the potential for less developed regions or non-border regions. In addition, the digital economy significantly boosts inter-regional trade in labor-intensive regions, while it has a limited effect on inter-regional trade in technology-intensive regions. Therefore, this study suggests increasing the construction of digital infrastructure in less developed regions, tapping the role of the digital economy in resource allocation, and promoting the in-depth integration of the digital economy with the region’s advantageous industries, so as to promote inter-regional trade and economic development.

Suggested Citation

  • Meiling Li & Lijie Zhang & Zhuangzhuang Zhang, 2023. "Impact of Digital Economy on Inter-Regional Trade: An Empirical Analysis in China," Sustainability, MDPI, vol. 15(15), pages 1-22, August.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:15:p:12086-:d:1212182
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/15/12086/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/15/12086/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nathan Nunn & Nancy Qian, 2014. "US Food Aid and Civil Conflict," American Economic Review, American Economic Association, vol. 104(6), pages 1630-1666, June.
    2. Costas Arkolakis & Arnaud Costinot & Andres Rodriguez-Clare, 2012. "New Trade Models, Same Old Gains?," American Economic Review, American Economic Association, vol. 102(1), pages 94-130, February.
    3. Grégory Jolivet & Hélène Turon, 2019. "Consumer Search Costs and Preferences on the Internet," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(3), pages 1258-1300.
    4. Trevor Tombe & Xiaodong Zhu, 2019. "Trade, Migration, and Productivity: A Quantitative Analysis of China," American Economic Review, American Economic Association, vol. 109(5), pages 1843-1872, May.
    5. Campos, Rodolfo G. & Timini, Jacopo & Vidal, Elena, 2021. "Structural gravity and trade agreements: Does the measurement of domestic trade matter?," Economics Letters, Elsevier, vol. 208(C).
    6. I-Hui Cheng & Howard J. Wall, 2005. "Controlling for heterogeneity in gravity models of trade and integration," Review, Federal Reserve Bank of St. Louis, vol. 87(Jan), pages 49-63.
    7. Benedikt Heid & Mario Larch & Yoto V. Yotov, 2021. "Estimating the effects of non‐discriminatory trade policies within structural gravity models," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(1), pages 376-409, February.
    8. Borchert, Ingo & Larch, Mario & Shikher, Serge & Yotov, Yoto V., 2021. "The International Trade and Production Database for Estimation (ITPD-E)," International Economics, Elsevier, vol. 166(C), pages 140-166.
    9. Senhua Huang & Lingming Chen, 2023. "The Impact of the Digital Economy on the Urban Total-Factor Energy Efficiency: Evidence from 275 Cities in China," Sustainability, MDPI, vol. 15(4), pages 1-20, February.
    10. Ana L.M. Sargento & Pedro Nogueira Ramos & Geoffrey J.D. Hewings, 2012. "Inter-Regional Trade Flow Estimation Through Non-Survey Models: An Empirical Assessment," Economic Systems Research, Taylor & Francis Journals, vol. 24(2), pages 173-193, March.
    11. Anthony Venables, 2001. "Geography and International Inequalities: The Impact of New Technologies," Journal of Industry, Competition and Trade, Springer, vol. 1(2), pages 135-159, June.
    12. Jun Wu & Tianyi Chen, 2022. "Impact of Digital Economy on Dual Circulation: An Empirical Analysis in China," Sustainability, MDPI, vol. 14(21), pages 1-15, November.
    13. Prithviraj Lakkakula & David W. Bullock & William W. Wilson, 2022. "Asymmetric information and blockchains in soybean commodity markets," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(1), pages 273-298, March.
    14. Huub Meijers, 2014. "Does the internet generate economic growth, international trade, or both?," International Economics and Economic Policy, Springer, vol. 11(1), pages 137-163, February.
    15. Abeliansky, Ana L. & Hilbert, Martin, 2017. "Digital technology and international trade: Is it the quantity of subscriptions or the quality of data speed that matters?," Telecommunications Policy, Elsevier, vol. 41(1), pages 35-48.
    16. Wei Zhang & Hao Zhou & Jie Chen & Zifu Fan, 2022. "An Empirical Analysis of the Impact of Digital Economy on Manufacturing Green and Low-Carbon Transformation under the Dual-Carbon Background in China," IJERPH, MDPI, vol. 19(20), pages 1-22, October.
    17. Bai, Chong-En & Du, Yingjuan & Tao, Zhigang & Tong, Sarah Y., 2004. "Local protectionism and regional specialization: evidence from China's industries," Journal of International Economics, Elsevier, vol. 63(2), pages 397-417, July.
    18. Qing Wei & Chuansheng Wang & Cuiyou Yao & Dong Wang & Zhihua Sun, 2022. "Identifying the Spatiotemporal Differences and Driving Forces of Residents’ Consumption at the Provincial Level in the Context of the Digital Economy," Sustainability, MDPI, vol. 14(21), pages 1-24, October.
    19. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
    20. Mirco Peron & Giuseppe Fragapane & Fabio Sgarbossa & Michael Kay, 2020. "Digital Facility Layout Planning," Sustainability, MDPI, vol. 12(8), pages 1-17, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ingo Borchert & Mario Larch & Serge Shikher & Yoto V. Yotov, 2022. "Disaggregated gravity: Benchmark estimates and stylized facts from a new database," Review of International Economics, Wiley Blackwell, vol. 30(1), pages 113-136, February.
    2. Campos, Rodolfo G. & Timini, Jacopo & Vidal, Elena, 2021. "Structural gravity and trade agreements: Does the measurement of domestic trade matter?," Economics Letters, Elsevier, vol. 208(C).
    3. Yang, Yichen & Liu, Wen, 2024. "Free trade agreements and domestic value added in exports: An analysis from the network perspective," Economic Modelling, Elsevier, vol. 132(C).
    4. Yoto V. Yotov, 2021. "The Variation of Gravity within Countries (or 15 Reasons Why Gravity Should Be Estimated with Domestic Trade Flows)," CESifo Working Paper Series 9057, CESifo.
    5. Díaz-Mora, Carmen & Esteve-Pérez, Silviano & Gil-Pareja, Salvador, 2023. "A re-assessment of the heterogeneous effect of trade agreements using intra-national trade flows," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 940-951.
    6. Timini, Jacopo, 2023. "Revisiting the ‘Cobden-Chevalier network’ trade and welfare effects," Explorations in Economic History, Elsevier, vol. 89(C).
    7. Mario Larch & Yoto V. Yotov, 2024. "Estimating the effects of trade agreements: Lessons from 60 years of methods and data," The World Economy, Wiley Blackwell, vol. 47(5), pages 1771-1799, May.
    8. Georg Schneider & Frank Stähler & Georg U. Thunecke, 2022. "The (Non-)Neutrality of Value-Added Taxation," CESifo Working Paper Series 9663, CESifo.
    9. Paudel, Nawaraj S. & Lahiri, Sajal, 2024. "The effects of state-level foreign manufacturing imports on domestic inter-state and intra-state sales in the U.S.A," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 297-305.
    10. Anderson, James E. & Yotov, Yoto V., 2020. "Short run gravity," Journal of International Economics, Elsevier, vol. 126(C).
    11. Rodolfo G. Campos & Benedikt Heid & Jacopo Timini, 2024. "The Economic Consequences of Geopolitical Fragmentation: Evidence from the Cold War," CESifo Working Paper Series 11057, CESifo.
    12. Anderson, James E. & Yotov, Yoto V., 2016. "Terms of trade and global efficiency effects of free trade agreements, 1990–2002," Journal of International Economics, Elsevier, vol. 99(C), pages 279-298.
    13. Gabriel Felbermayr & Mario Larch & Erdal Yalcin & Yoto V. Yotov, 2024. "On the heterogeneous trade and welfare effects of GATT/WTO membership," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 160(3), pages 983-1008, August.
    14. Benedikt Heid & Mario Larch & Yoto V. Yotov, 2021. "Estimating the effects of non‐discriminatory trade policies within structural gravity models," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(1), pages 376-409, February.
    15. James E. Anderson & Yoto V. Yotov, 2022. "Quantifying the Extensive Margin(s) of Trade: The Case of Uneven European Integration," CESifo Working Paper Series 9822, CESifo.
    16. Timini, Jacopo & Viani, Francesca, 2022. "A highway across the Atlantic? Trade and welfare effects of the EU-Mercosur agreement," International Economics, Elsevier, vol. 169(C), pages 291-308.
    17. Anderson, James E. & Borchert, Ingo & Mattoo, Aaditya & Yotov, Yoto V., 2018. "Dark costs, missing data: Shedding some light on services trade," European Economic Review, Elsevier, vol. 105(C), pages 193-214.
    18. Bergstrand, Jeffrey H. & Larch, Mario & Yotov, Yoto V., 2015. "Economic integration agreements, border effects, and distance elasticities in the gravity equation," European Economic Review, Elsevier, vol. 78(C), pages 307-327.
    19. Rebecca Freeman & Mario Larch & Angelos Theodorakopoulos & Yoto V. Yotov, 2021. "Unlocking New Methods to Estimate Country-Specific Trade Costs and Trade Elasticities," CESifo Working Paper Series 9432, CESifo.
    20. Felbermayr, Gabriel & Yotov, Yoto V., 2021. "From theory to policy with gravitas: A solution to the mystery of the excess trade balances," European Economic Review, Elsevier, vol. 139(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:15:p:12086-:d:1212182. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.