Can information infrastructure break the imbalance between urban and rural development? Empirical evidence from China

In confronting the urgent challenges within the realm of international development, it has become imperative to explore novel pathways for economic growth, diminish the income disparity among diverse societal segments, and alleviate the discrepancies between urban and rural regions. However, previous research has yet to comprehensively investigate whether information infrastructure holds the potential to narrow the urban-rural development gap. Furthermore, the distinctive contributions of traditional infrastructure and information infrastructure to economic development have been insufficiently explored and compared. Drawing upon data from the China Household Panel Study (CFPS) spanning the period 2010–2018, this study extensively examines the role and advantages of information infrastructure in bridging the urban-rural development gap. By employing the fixed effect model and employing the ‘Broadband China’ strategy as a proxy variable for information infrastructure enhancement, the study reveals that the improvement of information infrastructure significantly amplifies the total income of Chinese households, with a pronounced impact in rural areas. The emergence of a ‘catch-up effect’ serves to diminish the income disparity between urban and rural areas. Moreover, when contrasted with contemporaneous investments in traditional infrastructure, which have reached a state of relative saturation in China, the positive effect of information infrastructure upgrading surpasses that of traditional infrastructure investment. Hence, upgrading information infrastructure effectively addresses the imbalances in urban and rural development and narrows the income gap. These findings carry considerable implications for government bodies in formulating development policies.