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How Does Digital Economy Affect Rural Revitalization? The Mediating Effect of Industrial Upgrading

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  • Tao Cen

    (College of International Economics & Trade, Ningbo University of Finance & Economics, Ningbo 315175, China
    Ningbo Key Research Base for Philosophy and Social Studies “Regional Open Cooperation and Free Trade Zone Research Base”, Ningbo 315175, China)

  • Shuping Lin

    (College of International Economics & Trade, Ningbo University of Finance & Economics, Ningbo 315175, China
    Ningbo Key Research Base for Philosophy and Social Studies “Regional Open Cooperation and Free Trade Zone Research Base”, Ningbo 315175, China)

  • Qiaoyun Wu

    (College of Wealth Management, Ningbo University of Finance & Economics, Ningbo 315175, China)

Abstract

Since the reform and opening up in 1978, China’s economy has grown significantly, but rural development still lags. China has implemented a rural revitalization strategy to reduce the gap between urban and rural areas. Meanwhile, the digital economy has gradually become a new economic growth engine for China. With the digitalization of rural industries, the digital economy gradually integrated into rural development and revitalization. However, how the digital economy impacts rural revitalization remains unclear. Based on the entropy method, previous studies measured rural revitalization levels from the perspectives of economy, civilization, and ecological environment. In this paper, using panel data from 11 prefecture-level cities in Zhejiang Province from 2011 to 2019, we use the entropy method to quantify the development level of the digital economy, industrial upgrading, and rural revitalization. Then, we investigate the relationship among them using fixed effect regression. The empirical results show that the digital economy obviously promotes rural revitalization. The mediation effect test shows that industrial upgrading plays a mediating mechanism between the digital economy and rural revitalization. In addition, heterogeneity analysis reveals that the promotion effect of the digital economy on rural development in southwestern Zhejiang is stronger than that of northeastern Zhejiang. The results imply that government should strengthen digital infrastructure construction in rural areas to promote rural revitalization. Moreover, rural areas with different economic development levels should implement a differentiated rural revitalization strategy.

Suggested Citation

  • Tao Cen & Shuping Lin & Qiaoyun Wu, 2022. "How Does Digital Economy Affect Rural Revitalization? The Mediating Effect of Industrial Upgrading," Sustainability, MDPI, vol. 14(24), pages 1-13, December.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:24:p:16987-:d:1007282
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    References listed on IDEAS

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    5. Yuan Wang & Yifang Huang & Yihua Zhang, 2023. "Coupling and Coordinated Development of Digital Economy and Rural Revitalisation and Analysis of Influencing Factors," Sustainability, MDPI, vol. 15(4), pages 1-23, February.

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