Digital Economy Enables High-Quality Economic Development: Theoretical Mechanisms and Empirical Evidence

Abstract

Digital economy has become the primary motivation for high-quality economic development. Upon comprehensively analyzing the connotation of digital economy, this paper constructs an evaluation system from development environment, digital industrialization, industrial digitalization, and digital governance to measure China’s digital economy index from 2016 to 2018 using the entropy-based TOPSIS method. Also, based on the improved Feder dual sector model, this paper discusses the theoretical mechanism of digital economy promoting high-quality economic development directly and through improving economic efficiency and economic structure, and carries out an empirical test. According to findings, on the one hand, China is scaling up digital economy and accelerating digital transformation; on the other hand, the greater the likelihood that high-quality economic development is constrained by low economic efficiency and unreasonable economic structure, the greater the role of digital economy in promoting high-quality economic development. Therefore, this paper puts forward recommendations for China’s high-quality economic development, such as advancing new infrastructure construction, developing digital economy, improving economic efficiency and economic structure, and transforming the government governance model.

Keywords

digital economy, economic efficiency, economic structure, high-quality economic development

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