How does digital infrastructure break the resource curse of cities? Evidence from a quasi-natural experiment in China

Abstract

Digital infrastructure plays a pivotal role in optimizing resource allocation and fostering sustainable economic development. The question of whether digital infrastructure can break the "resource curse" in cities has been a subject of debate, with a dearth of substantial empirical evidence. Based on data from 2010 to 2021 at the prefecture level, this study employs an asymptotic difference-in-difference model to thoroughly investigate the effectiveness and underlying mechanisms of digital infrastructure, particularly in relation to the "Broadband China" strategy, in breaking the resource curse. Our findings reveal that digital infrastructure has a significant impact on mitigating the resource curse in cities. Mechanism testing demonstrates that digital infrastructure exerts a restraining effect on the "resource curse" by enhancing green innovation technologies, promoting the development of the manufacturing industry, and elevating entrepreneurial levels. Notably, digital infrastructure has a more pronounced effect in mitigating the "resource curse" in the central and western regions as well as resource-cursed areas. Furthermore, it's worth noting that the higher the level of marketization in a region, the more pronounced the effect of digital infrastructure in alleviating the "resource curse." Consequently, it is imperative to expedite the promotion of digital infrastructure construction, optimize market management mechanisms, and fully harness the advantages of digital infrastructure to facilitate the transformation of resource-based cities.