How does digital economy affect the development of common prosperity level?

Abstract

Abstract Digital economy is not only a new driving force for economic growth, but also a new way to promote common prosperity. This paper examines how digital economy affects common prosperity development in China, using spatial Durbin model and panel data of 30 provinces from 2012 to 2022 to empirically analyze the direct effect, spatial spillover effect, and marginal incremental effect of the digital economy in terms of driving the development of common prosperity. The research results show that the digital economy has a significant positive direct effect and spatial spillover effect on the development of common prosperity, and there is a marginal incremental effect, i.e., the higher the level of the digital economy, the greater the promotion of the development of common prosperity. Plus, total factor productivity enhances the relationship between digital economy and common prosperity. The paper reveals the mechanism and path of digital economy’s impact on common prosperity, and provides theoretical and policy implications for improving digital economy strategy and promoting high-quality development and common prosperity.