Affluent Cities and Digitalization

Abstract

Urban development literature has gained great traction due to the unprecedent challenges that cities face, and digitalization has been signaled as a game-changer against these challenges. However, the effects that urban digitalization might have on the economic prosperity at city-level remain unexplored. This research analyzes the bidirectional relationship between the digitalization degree and the economic situation of a city, based on a sample of 404 cities. The analysis resulted in confirming the positive bidirectional relationship between digitalization levels and the city's economic condition. If the economic prosperity of a city increases, so does its level of digitalization and if cities embrace and integrate digitalization, there is a positive impact on their economic growth. Thus, economic development and technological advancement mutually reinforce each other in urban contexts. This study not only aims to nurture the urban literature, but also to shed light on the shift towards the cities of the future.