Dividend differentiation, latecomer advantage and diminishing returns: the heterogenous impact of digital technology progress on China’s economic modernization

Advances in digital technology are driving a new modernization of economic systems, but the impact is clearly heterogeneous. This study pioneers an economic modernization index evaluation system from the four dimensions of economic innovation, economic greening, economic openness and industrial modernization, and quantitatively analyzes heterogeneous impacts of digital technology progress on economic modernization by panel fixed effect model and threshold regression model, utilizing 11-year provincial panel data (2013–2023) across 30 China’s provinces. The general findings discover that the progress of digital technology has significantly propelled the construction of China’s economic modernization in general. However, in the sub-dimensions of economic modernization, the promoting effect of digital technology progress on economic innovation is stronger than its impact on economic modernization and greening, while the impact on economic openness is not significant and there is an obvious differentiation phenomenon. At the regional level, the promoting effect of digital technology progress on economic modernization is larger in China’s western region relative to eastern China, and stronger in regions with lower level of economic modernization in comparison to regions with higher level, showing a latecomer advantage. Moreover, the enhancing effect of digital technology progress on economic modernization also has the nonlinear feature of “diminishing marginal effect”. Such findings can offer government policy-designer insights in coordinating the use of digital technology dividend, narrowing the regional development gap, identifying the weak points of digital technology dividend, and accelerating the national economic modernization. First published online 4 March 2026