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Does the Digital Economy Promote Industrial Collaboration and Agglomeration? Evidence from 286 Cities in China

Author

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  • Senhua Huang

    (Department of Economics, School of Business, Hunan University of Science and Technology, Xiangtan 411201, China
    Department of International Economics and Trade, School of Economics and Management, Shaoyang University, Shaoyang 422000, China)

  • Wenzhong Ye

    (Department of Economics, School of Business, Hunan University of Science and Technology, Xiangtan 411201, China)

  • Feng Han

    (Department of Economics, School of Economics, Nanjing Audit University, Nanjing 211815, China)

Abstract

Relying on high penetration and strong diffusion capabilities, the digital economy is becoming a new driving force for industrial integration and development. It is of great significance to promote the coordinated development of manufacturing and producer services. This paper took panel data on 286 prefecture-level cities and above in China from 2011 to 2019 as its research object, and used the two-way fixed effect model, threshold effect model, and the Spatial Durbin Model (SDM) as its econometric testing methods. This analysis explored the impact of the digital economy on the synergetic agglomeration between manufacturing and productive service industries in China. The results of the research showed that the synergetic agglomeration of industries is significantly promoted by the digital economy. This conclusion was still valid after an endogeneity test was carried out. The digital economy’s role was found to mainly involve promoting knowledge spillovers and expanding the market size. An in-depth analysis of the digital economy has enabled the collaborative agglomeration of manufacturing and producer services in large, medium-sized, and small cities. The digital economy had the greatest effect on small cities, followed by medium-sized cities and large cities. The synergetic aggregation between the manufacturing and high-end producer services industries is significantly promoted by the digital economy. However, it was not found to have had a significant effect on the synergetic agglomeration between the manufacturing and low-end producer services industries. The impact of the digital economy on industrial collaborative agglomeration is nonlinear. Only when the level of the digital economy exceeds the threshold can the promoting effect of the digital economy on industrial collaborative agglomeration be manifested. In summary, the development of the digital economy was found to have promoted industrial collaboration and agglomeration in the study areas and their neighboring regions in the study period. The research results of this article are of great significance for achieving the goal of the “two-wheel drive” of the manufacturing and producer services industries, as well as high-quality economic development in China.

Suggested Citation

  • Senhua Huang & Wenzhong Ye & Feng Han, 2023. "Does the Digital Economy Promote Industrial Collaboration and Agglomeration? Evidence from 286 Cities in China," Sustainability, MDPI, vol. 15(19), pages 1-24, October.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:19:p:14545-:d:1254814
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    References listed on IDEAS

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    Cited by:

    1. Shan Feng & Shuguang Liu, 2023. "Does AI Application Matter in Promoting Carbon Productivity? Fresh Evidence from 30 Provinces in China," Sustainability, MDPI, vol. 15(23), pages 1-19, November.

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