How the Digital Economy Affects International Trade Competitiveness: Empirical Evidence from China's Provincial Panel Data

The digital economy is increasingly becoming a vital engine for high-quality development and a key factor in reshaping the trade landscape. Based on provincial panel data from China spanning 2012 to 2022, this paper empirically examines the impact of the digital economy on foreign trade competitiveness. The findings reveal that the development of the digital economy has a significant positive effect on China's foreign trade competitiveness. Mechanism analysis indicates that the digital economy enhances trade competitiveness by promoting industrial structure upgrading and attracting foreign direct investment (FDI). Heterogeneity analysis further shows regional disparities in this impact, with the inland regions benefiting more than the coastal areas. Accordingly, this paper proposes policy recommendations such as vigorously developing the digital economy and implementing regionally differentiated strategies for coordinated development, in order to continuously enhance China's digital trade competitiveness.