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Digital economy and economic competitive pressure on local governments: Evidence from China

Author

Listed:
  • Yongming Miao

    (School of Management, Hefei University of Technology, China)

  • Yaokuang Li

    (School of Management, Hefei University of Technology, China)

  • Yanrui Wu

    (Department of Economics, University of Western Australia, Perth, Australia)

Abstract

For decades, fiscal decentralization and gross domestic product growth targeting have resulted in fierce economic competition among local governments in China, putting tremendous economic competitive pressure on them. The latter has serious social and economic implications and is a major issue for policymakers. This study analyzes data from China’s 30 provinces for 2011–2021. It demonstrates that digital economic development could considerably reduce economic, competitive pressure on local governments, with trade openness and entrepreneurial dynamism serving as impact mechanisms. This study also found that the alleviating effects are more pronounced in regions with a poor innovation environment, a less developed economy, or lagging human resources. These findings emphasize the important role of the digital economy in increasing regional competitiveness and reducing regional disparities.

Suggested Citation

  • Yongming Miao & Yaokuang Li & Yanrui Wu, 2024. "Digital economy and economic competitive pressure on local governments: Evidence from China," Economics Discussion / Working Papers 24-06, The University of Western Australia, Department of Economics.
    • Handle: RePEc:uwa:wpaper:24-06
    Note: MD5 = 678bceba784a95b30eae81386b020432
    as

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    File URL: https://ecompapers.biz.uwa.edu.au/paper/PDF%20of%20Discussion%20Papers/2024/DP%2024.06_Miao%20Li%20and%20Wu.pdf
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    More about this item

    Keywords

    digital economy; economic competition; trade openness; entrepreneurial dynamism; China;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics

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