Does digital economy development promote innovation efficiency? A spatial econometric approach for Chinese regions

Abstract

ABSTRACT In the context of the rapid development of the digital economy, it’s an important topic how to play the role of digital technology in improving innovation efficiency. Employing the spatial econometric model with province-level panel data during 2006–2018, the article explores the impact of the development of the digital economy on innovation efficiency in China. The analysis unveils three major findings. First, the innovation efficiency has significant positive spatial externalities and the digital economy has significantly positive direct effects and spatial spillover effects on innovation efficiency, but the above effects are heterogeneous for different regions and innovation subjects. Second, the impact of digital economy development on innovation efficiency has characteristics of a certain degree of lag effect and continuity. Third, the threshold effect analysis reveals the non-linear characteristic of the increasing marginal effect of the digital economy on innovation efficiency. Altogether, the development of the digital economy has become an important driving force for promoting China’s innovation efficiency. The findings of this paper provide empirical evidence for understanding the relationship between the digital economy development and innovation efficiency, giving significant implications for the innovative development of developing countries.