Can Industrial Digitalization Boost a Consumption-Driven Economy? An Empirical Study Based on Provincial Data in China

Abstract

A consumption-driven economy refers to an economic growth model primarily driven by domestic consumption and is a common goal for the economic growth of various countries. To explore the impact of industrial digitalization on a consumption-driven economy, this paper conducts an empirical study based on data from 31 provinces in China from 2013 to 2021. The empirical test results indicate: first, industrial digitalization significantly promotes the development of a consumption-driven economy, mainly reflected in the improvement of economic foundation and consumption levels, but shows no significant effect on improving the consumption structure. Second, mechanism analysis results show that industrial digitalization can promote the development of a consumption-driven economy by fostering innovation and advancing the industrial structure. Third, heterogeneity analysis results reveal that the promotion effect of industrial digitalization on the consumption-driven economy exists only in eastern and central China but not in western China, indicating that industrial digitalization in underdeveloped areas cannot exert a positive effect on the consumption-driven economy.