The Impact of the Digital Economy on Urban Entrepreneurial Vitality

Abstract

The digital economy is increasingly being recognized as a key driver for innovation and entrepreneurship in the age of information technology, making it crucial for the high-quality development of the Chinese economy. This study examines the impact of the digital economy on urban entrepreneurial vitality and investigates the underlying mechanisms by utilizing panel data from 282 prefecture-level cities in China spanning the period from 2011 to 2019. Our empirical findings demonstrate that the development of the digital economy has had a positive effect on urban entrepreneurial vitality, which is robust to various sensitivity tests. Our mechanism analysis indicates that expanding market space and reducing financing constraints are key channels through which the digital economy enhances urban entrepreneurial vitality. Further investigation reveals that the effect of the digital economy on urban entrepreneurial vitality is influenced by city size, level, and region, as well as industrial structure and export openness, indicating a heterogeneous effect across different cities.