Research on the Impact of Digital Infrastructure Construction on Baumol's Cost Disease in the Service Industry——Empirical Evidence from Chinese Cities
In recent years,China has entered a new era dominated by the service economy. However,according to the Baumol-Fox hypothesis,labor productivity growth in the service sector lags behind that of the manufacturing industry. This has resulted in a significant shift of labor into the service industry,increasing the proportion of service-sector employment. An industrial structure dominated by the service sector may slow overall economic growth,a phenomenon known as "Baumol's cost disease." The development of digital infrastructure offers potential to mitigate these effects by enhancing both the manufacturing and service industries through improvements in consumption,investment,technological transformation,and production. Digital infrastructure can optimize industrial structure,improve efficiency,and create new opportunities for economic growth.This article uses data from 288 prefecture-level cities in China between 2011 and 2019 to examine how digital infrastructure construction can alleviate Baumol's cost disease in the service industry. Through instrumental variable regression and robustness checks,the analysis shows that digital infrastructure can effectively counter this economic challenge. Mechanism testing reveals that economies of scale and structural optimization are the key channels through which digital infrastructure mitigates the negative effects of Baumol's cost disease. Specifically,both traditional spatial agglomeration and virtual agglomeration in the producer service industry contribute to optimizing the service industry's internal structure.The heterogeneity analysis further demonstrates that the impact of digital infrastructure on alleviating Baumol's cost disease varies according to regional institutional environments and geographical factors. In cities with higher levels of marketization,stronger intellectual property protection,and greater social trust,digital infrastructure construction is more effective in promoting service-sector growth and mitigating Baumol's cost disease. Additionally,large and very large cities have benefited more significantly from digital infrastructure,showing marked improvements in service-sector efficiency.This study contributes to the literature in three main ways. First,it addresses a critical practical issue by investigating how digital infrastructure development can alleviate Baumol's cost disease in China's service industry,providing new insights into improving service-sector efficiency and narrowing the productivity gap between services and manufacturing. Second,it highlights the dual roles of economies of scale and structural optimization in this process,offering a clear mechanism through which digital infrastructure can promote industrial upgrading. Finally,the paper examines the heterogeneous impacts of factors such as marketization,intellectual property protection,and social trust on the relationship between digital infrastructure and service-sector development,providing evidence for more inclusive and targeted digital infrastructure policies.The findings of this research offer valuable guidance for policymakers seeking to overcome Baumol's cost disease and achieve high-quality,inclusive economic growth through the strategic development of digital infrastructure.
digital infrastructure developmentproductivity of the service industryBaumol's cost diseaseeconomies of scalestructural optimizationvirtual agglomeration
万方数据
