Abstract
Is the development of digital economy necessarily beneficial to foreign direct investment (FDI)? Based on panel data of Chinese prefecture-level cities from 2011-2019, the article empirically tests the spatial spillover effects between the digital economy and FDI using a two-way fixed effects model. The results show that FDI inflows between cities have significant spatial correlation, and a city's digital economy development level has an inverted U-shaped relationship with its geographic and economic proximity to urban FDI inflows.
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