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Research on the Effect of Digital Economy Development on Local Financial Pressure

Author

Listed:
  • Baolin Song

    (School of management, Hebei University, Baoding, China)

  • Xinrui Hu

    (School of management, Hebei University, Baoding, China)

  • Hang Zhang

    (School of management, Hebei University, Baoding, China)

  • Yanchen Gao

    (Political Economics, King's College London, London, UK)

  • Yuan Guo

    (School of Economics and Management, Cangzhou Jiaotong College, Cangzhou, China)

Abstract

The vigorous development of the digital economy provides a new research perspective for alleviating local financial pressure. Based on the provincial panel data from 2013 to 2020, the mediating effect model and threshold regression model were used to explore the effect and mechanism of the digital economy on local fiscal pressure. The research shows that the digital economy has a significant alleviating effect on local financial pressure by increasing fiscal revenue, and this alleviating effect has a threshold effect on entrepreneurial activity. From the perspective of dimension, the alleviating effect of the digital economy development environment on local financial pressure is better than that of digital industrialization and industrial digitization. From a regional perspective, the digital economy has the most apparent impact on the western region. In addition, the quantile regression results show that with the increase in financial pressure, the easing effect of the digital economy shows an inverted U-shaped change. Therefore, in order to effectively alleviate the financial pressure on local governments, China should continue to promote the development of the digital economy, take multiple measures to increase entrepreneurial activity, and encourage various regions to implement differentiated digital economy development strategies according to local conditions.

Suggested Citation

  • Baolin Song & Xinrui Hu & Hang Zhang & Yanchen Gao & Yuan Guo, 2023. "Research on the Effect of Digital Economy Development on Local Financial Pressure," Journal of Economic Statistics, Anser Press, vol. 1(1), pages 77-93, February.
    • Handle: RePEc:bba:j00005:v:1:y:2023:i:1:p:77-93:d:117
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    References listed on IDEAS

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    1. Pan, Wenrong & Xie, Tao & Wang, Zhuwang & Ma, Lisha, 2022. "Digital economy: An innovation driver for total factor productivity," Journal of Business Research, Elsevier, vol. 139(C), pages 303-311.
    2. Makin, Anthony J. & Layton, Allan, 2021. "The global fiscal response to COVID-19: Risks and repercussions," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 340-349.
    3. Junhong Bai & Jiayu Lu & Sijia Li, 2019. "Fiscal Pressure, Tax Competition and Environmental Pollution," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(2), pages 431-447, June.
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    1. Li, Zihao & Bai, Tingting & Qian, Jingwen & Wu, Haitao, 2024. "The digital revolution's environmental paradox: Exploring the synergistic effects of pollution and carbon reduction via industrial metamorphosis and displacement," Technological Forecasting and Social Change, Elsevier, vol. 206(C).
    2. Li, Mo & Yang, Jing, 2024. "Can digital economy mitigate vertical fiscal imbalances in Chinese local government? The role of fiscal transparency," International Review of Financial Analysis, Elsevier, vol. 96(PB).

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