Digital Economy, Industrial Structure, and Regional Trade Dependence: Mechanism Analysis Based on Chinese City Data

Abstract

This paper aims to study the intricate interplay among the digital economy, industrial structure, and the degree of dependence on foreign trade. We utilize panel data from 284 prefecture-level cities in China spanning from 2011 to 2019 to comprehensively evaluate the level of digital economy development and investigate its influence on regional trade dependence. Additionally, we explore the role played by the industrial structure in the mechanism analysis. Our findings reveal that the digital economy significantly reduces regional trade dependence, while industrial structure upgrading notably enhances regional trade dependence. Moreover, the industrial structure upgrading weakens the influence of the digital economy on regional trade dependence, but such impact varies across regions as the impact of digital economy on foreign trade dependence is more pronounced in inland areas. This paper also facilitates the exploration of how the digital economy empowers domestic economic growth.