Digital economy and industrial agglomeration

Abstract

The rising digital economy has reshaped social and economic forms, exerting a profound impact on the industrial structure development. However, few studies have linked digital economy with industrial agglomeration. This paper studied the panel data of 30 provinces in China from 2011 to 2020, constructed the corresponding indicator measurement system to analyze the scale level of China's digital economy and the level of industrial agglomeration. It put forward three hypotheses of the mechanism of digital economy affecting industrial agglomeration, including spatial spillover effect and threshold effect, spatial SDM model with two-way fixed effect and threshold regression model were used to make an empirical analysis. It is found that the digital economy inhibits the industrial agglomeration in the local area and has a positive spatial spillover effect on the surrounding areas, whose impact on the industrial agglomeration is regional heterogeneity. Digital economy has non-linear threshold effect on industrial agglomeration, which exists industry heterogeneity.