Does digital trade promote China's manufacturing industry upgrading?-based on structure rationalization perspective

This paper explores how digital trade facilitates the optimization and upgrading of the manufacturing industry from the standpoint of structural rationalization, based on panel data collected from 30 provinces between 2013 and 2021 in China. The findings indicate that: first, the growth of digital trade can significantly aid in the manufacturing industry rationalization and upgrading. This can be achieved through four indirect channels, including technological innovation, transaction costs, consumer demand, and human capital, in addition to direct effects. Second, the heterogeneity analysis discovers that the growth of digital trade considerably aids in the manufacturing industry rationalization and upgrading in the central and western areas. Finally, the promotion of digital trade on the rationalization and upgrading exhibits threshold effect characteristics, whether based on a nationwide sample or regional heterogeneity. As digital trade exceeds the certain threshold value, it demonstrates that digital trade greatly increases the manufacturing industry's level of rationalization and upgrading.