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Digital economy and urban innovation level: A quasi-natural experiment from the strategy of “Digital China”

Author

Listed:
  • Chong Zhang

    (Chongqing Technology and Business University
    Chongqing Technology and Business University)

  • Baoliu Liu

    (Beijing University of Technology
    Beijing University of Technology)

  • Yuhan Yang

    (Chongqing Technology and Business University)

Abstract

The digital economy is an essential engine of the innovation-driven development strategy and plays a valuable role in promoting the high-quality development of the regional economy. Based on the panel data of 286 cities in mainland China with the help of the digital economy strategic plans issued by local governments as a quasi-natural experiment, we use the multi-temporal double-difference (DID) method to examine the impact of the digital economy on the urban innovation level. Findings show that the digital economy can significantly improve the urban innovation level. After a series of robustness tests, such as parallel trend test, updating sample and period, and repeated placebo test, the innovation-driving effect generated by the development of the digital economy remains significant. Results of the mechanism analysis indicate that the digital economy enhances the level of innovation through upgrading industrial structures. In addition, we find through the heterogeneity test that the digital economy has a stronger effect on improving the quality of innovation. Meanwhile, the innovation output in the Middle Eastern region is more significantly affected by the “Digital China” strategy than the Western region. Therefore, we should accelerate the implementation of the local digital economy development strategy to realize the high-quality development of the regional economy.

Suggested Citation

  • Chong Zhang & Baoliu Liu & Yuhan Yang, 2024. "Digital economy and urban innovation level: A quasi-natural experiment from the strategy of “Digital China”," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-12, December.
    • Handle: RePEc:pal:palcom:v:11:y:2024:i:1:d:10.1057_s41599-024-03122-1
    DOI: 10.1057/s41599-024-03122-1
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    Cited by:

    1. Tian Zhang & Rong Zhang, 2024. "The spatial effect of low-carbon development of regional industries driven by the digital economy: evidence from Chinese cities," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-13, December.

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