Digital Economy, Technological Innovation, and Entrepreneurial Activity: Evidence from Chinese Provinces

This study examines the relationship between digital economy development and enterprise upgrading in China, with particular attention to the mediating roles of green technology innovation and entrepreneurial activity. It also investigates provincial heterogeneity and conducts robustness tests. The analysis uses panel data for 30 Chinese provinces covering 2010–2024, obtained from the National Bureau of Statistics of China. Fixed-effects regression models are employed to examine the relationship between digital economy development and enterprise upgrading. The results indicate a significant positive association between digital economy development and enterprise upgrading, with a coefficient of 0.52 in the full model. Green technology innovation and entrepreneurial activity are identified as important mediating mechanisms through which the digital economy may contribute to enterprise upgrading. The provincial heterogeneity analysis indicates that the digital economy is positively associated with enterprise upgrading across the regions examined, although the magnitude of the association varies; the estimated effect is more pronounced in the eastern and midwestern regions. The findings remain robust across the reported robustness tests. The results further suggest that the digital economy can facilitate innovation by enabling rapid prototyping, data-driven decision-making, and more efficient resource allocation, while reducing operating and market-entry costs for entrepreneurs. The study recommends strengthening digital literacy programmes, improving cybersecurity, and developing regionally responsive digital economy policies to promote more balanced development across eastern, central, and western China.