Unlocking Economic Resilience: A New Methodological Approach and Empirical Examination under Digital Transformation

Abstract

Economic resilience is crucial for urban sustainability as it ensures stability and growth in the face of external shocks, promotes social cohesion and inclusivity, fosters environmental sustainability, and enhances cities’ adaptability to future challenges. This study expands the conventional perspective on economic resilience beyond the context of shocks, focusing on the inherent resilience of regional economic systems. A novel method for quantifying economic resilience is introduced, emphasizing system sensitivity and adaptability. Using Chinese prefecture-level city data and an econometric model, we empirically examine how Fintech, a major digital transition in current urban systems, affects economic resilience. The findings reveal that Fintech has a substantial positive effect on economic resilience, primarily through the upgrading of industrial structures and technological innovation. Furthermore, there is significant regional heterogeneity in the impact of Fintech on economic resilience, with more pronounced contributions in the east, central, and western regions of China, as opposed to the northeast. Additionally, the impact of Fintech on economic resilience is more substantial in large-scale cities. The promotion of economic resilience through digital transformation serves as a potent risk prevention measure. Understanding the role of economic resilience in urban systems holds valuable implications for countries worldwide.