CAN DIGITAL ECONOMY FOSTER HIGH-QUALITY DEVELOPMENT? EVIDENCE FROM CHINA

The rapid evolution of Internet technology has amplified the pivotal role of the digital economy in promoting sustainable growth. Leveraging panel data from 278 Chinese cities (2011-2019), this study investigates how the digital economy drives high-quality development. City-level development metrics are quantified using the entropy method, and urban digital economy levels are assessed through principal component analysis (PCA). Employing a combination of benchmark regression analysis, mediation models, dynamic threshold panel frameworks and staggered difference-in-differences approach, we analyze the direct and indirect influences, nonlinear dynamics and policy effects of digital economy on high-quality development. Findings reveal that digital economy boosts high-quality development not only directly but also indirectly by fostering economic openness, green innovation and market potential. However, this positive relationship exhibits nonlinear characteristics. Ultimately, the natural experiment of phased "Broadband China" pilot policy further certifies the causal link between digital economic growth and urban development quality.