Digital Economy and Urban Innovation Quality: Unlocking the Power of Collaborative Innovation

ABSTRACT This study explores the impact of the digital economy on urban innovation quality, using data from 265 Chinese cities over the period 2012–2023. The results show that digital economy initiatives significantly enhance urban innovation quality, with pilot zones outperforming non‐pilot zones by 15%. The mechanism analysis emphasises the mediating role of collaborative innovation. Compared to the breadth of collaborative innovation, the digital economy has a relatively small effect on the depth of collaborative innovation; the depth of collaboration plays a more significant role in improving innovation quality. Further analysis shows that the digital economy's impact on innovation quality is stronger in regions with higher internet penetration and advanced industrial structures. In cities with higher internet penetration, innovation quality improves through deeper collaboration, whilst in cities with lower penetration, it improves mainly through broader networks. In cities with advanced industrial structures, the digital economy boosts both the breadth and depth of collaboration, enhancing innovation quality. This study enhances our understanding of how the digital economy drives urban innovation by unravelling the complex mechanisms behind collaborative innovation.