Digital Innovation and Regional Income Disparities in China: Impact, Mechanism, and Empirical Evidence

In the era of an innovation-driven digital economy, whether digital innovation narrows or widens regional income disparities remains a controversial issue. This study constructs a comprehensive evaluation index system to measure digital innovation and empirically examines the impact mechanism of digital innovation on regional income disparities in China from an economic perspective by employing panel regression, the spatial Durbin model, and the panel threshold model. A novel and key finding is that the marketization level acts as a critical threshold variable in the relationship between digital innovation and regional income disparities. Specifically, when the marketization level is below a certain threshold, digital innovation tends to widen regional income disparities; once it exceeds this threshold, digital innovation plays a significant role in narrowing such disparities. Moreover, the development of digital innovation has a significant narrowing effect on regional income disparities. Compared with its local impact, digital innovation can exert a more important effect on reducing income disparities in neighboring regions through significant spatial spillover effects. Accordingly, this paper puts forward targeted policy recommendations, including differentiated development strategies, enhanced spatial coordination, and accelerated digital innovation.