Broadband Expansion and Urban Decline: Evidence from China’s ‘Broadband China’ Pilot Policy”

Urban shrinkage has emerged as a persistent structural challenge as many cities experience population outflows, economic decline, and functional deterioration despite ongoing global urbanization. This study examines whether digital infrastructure can mitigate urban shrinkage by reducing spatial frictions and reshaping factor mobility. Exploiting the quasi-natural experiment created by China’s “Broadband China” pilot policy, we construct a multidimensional urban shrinkage index for Chinese prefecture-level cities from 2007 to 2021 and employ a difference-in-differences framework to identify the causal impact of digital infrastructure. The results show that digital infrastructure significantly mitigates urban shrinkage, with effects extending to neighboring cities through spatial spillovers. Mechanism analyses indicate that this effect operates by lowering incentives for factor withdrawal, specifically by fostering talent agglomeration (reducing information asymmetry and migration costs for skilled workers), promoting interregional technological complementarity (lowering coordination frictions in innovation networks), and alleviating air pollution (enhancing environmental monitoring and governance efficiency These findings highlight the role of digital infrastructure as a strategic tool for enhancing urban resilience and suggest that digital connectivity, governance capacity, and targeted regional planning are essential for addressing urban shrinkage.