Digital Economy and Rural Revitalization: Evidence from China Based on County-level Panel Data

Digital economy is a new driving force for China's economic development and the strategy of rural revitalization is the overall focus of the "three rural issues" in the new era. As the rapid penetration of digital technology into rural areas has a potential to integrate digital economy with rural revitalization, in-depth empirical research is needed to find out how digital economy drives China's rural revitalization. However, relevant studies mostly focus on the impact of digital economy on one dimension of rural revitalization and lack a systematic exploration of the overall impact of digital economy on rural revitalization. To fill the gap with previous studies, this study constructs county- level comprehensive index system by the entropy weighting method and examines the driving effect and mechanisms of digital economy on rural revitalization based on several digital economy indicators and rural revitalization score by using county-level panel data in Zhejiang during 2010-2021. This study shows that digital economy measured by rural e-commerce, digital finance indexes, and the number of households using broadband Internet has a driving effect on rural revitalization. Moreover, this study finds that technological innovation and industrial structure transformation are important mechanisms of digital economy driving rural revitalization. Therefore, it is recommended that the local government accelerate digital industrialization and industrial digitalization process.