An Analysis of the Impact of the Digital Economy on High-Quality Economic Development in China—A Study Based on the Effects of Supply and Demand

Abstract

The development of information technology draws forth the digital economy, representing the third form of economic and social development following the agricultural and industrial economies. It represents one of the new era’s most important economic growth points. How to use the advantages of the digital economy to escape the “Malthusian trap” has always been an essential part of the attention of economists and policymakers. This paper investigates the degree of development of China’s digital economy and employs the entropy method and fixed-effect model to test how the digital economy has impacted high-quality economic development. Based on the study, digital economy development significantly promotes high-quality economic development. After controlling various factors that influence high-quality economic development and using instrumental variables to correct endogenous estimation biases, the results remain stable. The analysis also finds that the digital economy in economically backward areas has a more significant impact on high-quality economic development. In addition, the analysis of Nax’s “Vicious Circle of Poverty” theory shows that the digital economy can promote high-quality economic development through the supply and demand effect. Therefore, it is imperative to actively promote digital economy development and form a dynamic balance between supply and demand at a higher level by stimulating the consumption potential to ensure high-quality economic growth.