Research on the Impact of the Digital Economy on Regional Economic Disparities

The digital economy is a new engine for China's economic growth and has played a crucial role in addressing the principal contradiction of unbalanced and inadequate development. It is of great significance to conduct an in - depth exploration of the impact of the digital economy on regional economic disparities for resolving the principal contradiction in China. Based on the balanced panel data of 284 prefecture - level and above cities in China from 2011 to 2021, this paper explores the impact of the digital economy on regional economic disparities through the two - way fixed effects model. The research findings indicate that during the sample period, the digital economy has exacerbated the unbalanced development of the regional economy, and this conclusion still holds after a series of robustness and endogeneity tests. The mechanism analysis reveals that the regional innovation capacity plays a decisive role in the impact of the digital economy on regional economic disparities. The higher the regional innovation capacity is, the greater the impact of the digital economy on regional economic disparities will be, while the agglomeration of production factors will inhibit this expanding impact. The heterogeneity analysis shows that the digital economy is conducive to the coordinated development of the eastern and central regions, and the impact of the digital economy on regional economic disparities is characterized by policy phasing and dynamics. The research conclusions of this paper have important implications for promoting the coordinated development of China's regional economy in the digital economy era.