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Can the Digital Economy Reduce the Rural-Urban Income Gap?

Author

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  • Zhengge Tu

    (School of Economics and Business Administration, Central China Normal University, Wuhan 430079, China
    Research Center of Low-Carbon Economy and Environmental Policies, Central China Normal University, Wuhan 430079, China)

  • Jiayang Kong

    (College of Computer and Information Science, Qinghai University of Science and Technology, Xining 810016, China
    Department of Computer Technology and Application, Qinghai University, Xining 810016, China)

  • Liping Sun

    (Audit Office, Shandong Normal University, Jinan 250014, China)

  • Botao Liu

    (School of Economics and Business Administration, Central China Normal University, Wuhan 430079, China
    Research Center of Low-Carbon Economy and Environmental Policies, Central China Normal University, Wuhan 430079, China
    School of Mathematics and Statistics, Central China Normal University, Wuhan 430079, China)

Abstract

Currently, the Chinese government is considering two major strategies, namely, developing the digital economy and achieving common prosperity, to address regional development imbalances. Using panel data from 276 Chinese cities spanning from 2011 to 2019, the article first employs the entropy method to measure China’s digital economy development, digital fusion application, and Internet accessibility. Subsequently, the paper evaluates the influence of the digital economy on regional development imbalances, focusing on the rural-urban income gap. The results show a significant reduction in the rural-urban income gap due to digital economy development. Notably, digital fusion applications have a greater impact on reducing the rural-urban income gap than Internet accessibility. In addition, a heterogeneity analysis reveals that the influence of the digital economy on the rural-urban income gap is only reflected in the eastern and western regions, with a more substantial effect observed in the western region. This study, to some extent, helps Chinese government officials distinguish the diverse impacts of different dimensions and regional variations in digital economies on the rural-urban income gap. Such insights can guide the government in strategically advancing digital economy development to accelerate the mitigation of regional disparities and achieve sustainable economic development.

Suggested Citation

  • Zhengge Tu & Jiayang Kong & Liping Sun & Botao Liu, 2024. "Can the Digital Economy Reduce the Rural-Urban Income Gap?," Sustainability, MDPI, vol. 16(2), pages 1-19, January.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:2:p:938-:d:1324128
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    References listed on IDEAS

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    1. Carl Dahlman & Sam Mealy & Martin Wermelinger, 2016. "Harnessing the digital economy for developing countries," OECD Development Centre Working Papers 334, OECD Publishing.
    2. Ward, Michael R. & Zheng, Shilin, 2016. "Mobile telecommunications service and economic growth: Evidence from China," Telecommunications Policy, Elsevier, vol. 40(2), pages 89-101.
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