How does the Digital Economy Affect Consumption Upgrading?Evidence from Prefecture-level Cities in China
Consumption is an important engine for domestic circulation.It is worth paying attention to whether the digital economy,as a new driving force for the development of the national economy in the new era,can drive consumption upgrading.This paper aims to clar-ify how the development of digital economy affects consumption upgrading.First,this pa-per theoretically analyzes the impact of digital economy on consumption upgrading and its mechanism.Then,we use the panel data of prefecture-level and above cities from 2011 to 2019 to conduct empirical tests.The results show that digital economy significantly promotes the improvement of consumption level and the upgrading of consumption structure.In other words,the digital economy helps to drive the"expansion"and"improvement"of consump-tion.This conclusion remains robust under conditions such as overcoming endogeneity bias,replacing core explanatory variables,replacing estimation methods,and excluding municipalities directly under the central government and municipalities with independent planning status.Mechanism analysis shows that digital economy promotes consumption up-grading through channels such as raising income level,optimizing industrial structure,and promoting human capital accumulation.Taking the income level as the threshold,we find that the promotion effect of digital economy on consumption level presents a"U"shape.Compared with first,second and third-tier cities,digital economy has a more obvious role in fourth and fifth-tier cities.Further analysis shows that the development of digital economy can alleviate consumption inequality and help promote the balanced development of con-sumption.This paper provides a research basis for expanding domestic demand based on digital economy,especially promoting the quality and capacity expansion of consumption.It is of great significance for accelerating the construction of a new development pattern dominated by domestic circulation.
Digital EconomyConsumption LevelConsumption StructureConsumption Upgrading
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