Impact of data as a production factor on the low-altitude economy

As data increasingly functions as a fundamental production factor in the modern economy, understanding its influence on fostering emerging industries has become essential. This study investigates how data factor development influences the low-altitude economy’s (LAE’s) growth in China, an emerging sector encompassing drone services, general aviation, and related commercial activities operating within low-altitude airspace. Using provincial panel data spanning 2012–2023, we apply a two-way fixed effects framework supplemented by instrumental variable estimation, Heckman selection correction, and propensity score matching for addressing potential endogeneity and selection bias. Results demonstrate that data factor development has a statistically significant positive effect on LAE performance, and this finding remains consistent across all estimation approaches. Further, we examine the transmission mechanisms through mediation analysis, revealing that digital infrastructure and research and development intensity are partial mediators linking data development to LAE growth. Digital infrastructure has a stronger mediating effect, underscoring the critical relevance of connectivity and communication networks for supporting low-altitude operations. Heterogeneity analyses indicate that the positive relationship is more evident in provinces with advanced industrial structures and geographically advantaged southern regions. These findings offer valuable guidance for policymakers, demonstrating that promoting LAE requires coordinated effort to strengthen data governance, expand digital infrastructure, and cultivate regional innovation capacity. Regions with less developed industrial bases may require targeted interventions to establish the preconditions for benefiting from data-driven growth in this strategic sector.