Digital knowledge transfer and regional development asymmetries: Empirical Evidence from European patent citations and geolocated economic activity

Regional coordinated development necessitates achieving sustained economic growth and balanced development through regional synergy. In the digital economy era, digital knowledge constitutes a critical source of technological progress and represents a significant determinant of regional coordinated development. This study employs a BERT-based large language model approach in conjunction with European patent citation data spanning 1977–2019 to quantify cross-regional digital knowledge flows, integrating nighttime light intensity and population grid data covering 2000–2020 to examine the impact of digital knowledge flow on regional coordinated development across 296 European NUTS-3 regions during 2001–2019. We extend traditional growth theory to incorporate digital economy dynamics through fixed-effects panel regression models with instrumental variable estimation to address endogeneity concerns. The core empirical findings demonstrate that digital knowledge flowing from developed to underdeveloped regions significantly promotes regional coordinated development, with a 1 % increase in digital knowledge flows associated with improved regional development balance. Mechanism analysis reveals that, conditional on industrial compatibility with digital knowledge in underdeveloped regions, enhancing supply-side adaptation to demand to mitigate factor endowment disparities constitutes the primary channel through which digital knowledge flow facilitates regional coordinated development. Heterogeneity analysis indicates that the effects of digital knowledge flow on regional coordinated development are more pronounced when digital knowledge flows from Western European developed cities to Eastern and Southern European underdeveloped cities, from large developed cities to small underdeveloped cities, and between cities with comparable development levels.