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Can the digital economy boost rural residents’ income? Evidence from China based on the spatial Durbin model

Author

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  • Tao, Jiancong
  • Wang, Zhe
  • Xu, Yujie
  • Zhao, Boyu
  • Liu, Jiaqi

Abstract

The digital economy, as a new economic form, has the potential to be a considerable driving force for promoting agricultural modernisation, accelerating the flow of information between urban and rural areas and increasing the income of rural residents, thereby contributing to rural revitalisation. However, it may also inevitably lead to issues such as widening the digital divide between urban and rural areas, which can impact the extent to which rural residents effectively benefit from the digital economy. This study employs provincial panel data from 2011 to 2020 and conducts a temporal global principal component analysis to measure the level of China's digital economy development. Based on this, the spatial Durbin model is employed for empirical testing and regional analysis of the impact and mechanisms of digital economy development on the per capita disposable income of rural residents. The partial linear function coefficient model is used for supplementary analysis. The results indicate the following: (1) there are regional disparities in China's digital economy development, with the highest levels in the eastern region, followed by the western region and the lowest levels in the central region, forming a U-shaped spatial structure; (2) the development of the digital economy has a suppressing effect on the per capita disposable income of rural residents in both the home province and neighbouring provinces, indicating that the digital economy has not become a growth booster for rural revitalisation; (3) regional results show that the negative spatial effects of the digital economy are in the eastern region, whereas the western region has considerable positive spatial spillover effects. In contrast, no notable spatial effects exist in the central region. Therefore, under the backdrop of the digital economy, it is necessary to promote agricultural transformation and increase rural residents’ income by tailoring strategies to regional characteristics.

Suggested Citation

  • Tao, Jiancong & Wang, Zhe & Xu, Yujie & Zhao, Boyu & Liu, Jiaqi, 2024. "Can the digital economy boost rural residents’ income? Evidence from China based on the spatial Durbin model," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 856-872.
    • Handle: RePEc:eee:ecanpo:v:81:y:2024:i:c:p:856-872
    DOI: 10.1016/j.eap.2024.01.004
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