Promoting urban-rural modernization from the perspective of the digital economy

Abstract

In an era defined by the digital divide, the digital economy has emerged as a pivotal force driving urban-rural modernization. This study analyzes China’s digital economy from 2011 to 2023, evaluating its influence on equitable regional development across 30 provinces, municipalities, and autonomous regions. We develop an index system to assess the modernization of urban and rural areas, quantify their developmental levels, and elucidate the mechanisms through which the digital economy drives urban-rural modernization. A novel digital economy index is constructed via the entropy weight method, and Moran’s I statistic is employed to detect spatial clustering. To address endogeneity, we apply a two-stage least squares (2SLS) model. While the Spatial Durbin Model captures spatial spillover effects, the results reveal pronounced regional disparities and spatial interdependencies. Digital economic growth generates regional spillovers, promoting modernization, yet simultaneously induces adverse local disruptions—unveiling a critical paradox between diffusion and disruption. Robustness tests substantiate our findings, reinforcing the study’s validity and reliability. Consequently, policy interventions should strategically harness digital dividends while mitigating institutional and distributive challenges. This research contributes novel empirical insights into spatial dynamics within digital transformations, guiding policymakers in economies experiencing similar digital evolution.