Research on the Impact of Digital Economy Development on Urban-rural

Income Gap

Wang, Ying ying

Abstract
The digital economy has developed rapidly, which has had a subtle impact on all aspects of our
economy and people's lives. The digital transformation provides an opportunity and possibility for
China to achieve harmonious regional economic development and narrow the gap between the
rich and the poor. Therefore, this paper examines the relationship between digital economy
development and the urban-rural income gap, and suggests suggestions to alleviate the problem of
large urban-rural income gap in China from the perspective of digital economy development.
Firstly, on the basis of relevant literature and existing theories, this paper defines and discusses the
meaning and characteristics of digital economy, and elaborates on how the digital economy
influences the urban-rural income gap in China. Secondly, this paper gives an overview of the
development status of China's digital economy, and discusses the three dimensions of digital
economy infrastructure, digital industrialization and digitalization of industry development of
China's digital economy, and at the same time, discusses the current situation and changing trends
of China's urban-rural income gap from three perspectives: absolute income gap, urban-rural
disposable income ratio and Thiel index. And then, the level index system measures the digital
economy index of 31 provinces, municipalities, and autonomous regions from 2011 to 2019.
Through the establishment of the fixed effect model, the relationship between digital economy
development and the urban-rural income gap in China is examined. The results shows that on a
national scale, the urban-rural income gap in China first narrows and then widens, showing a U-
shaped development trend with the development of the digital economy; Meanwhile, looking at
their relationship from the east, central and west, it is found that the U-shaped relationship
between the digital economy development and the urban-rural income gap is more obvious in the
most and least economically developed regions. In addition, the mediating and moderating effects
of the digital economy were examined, finding that digital economy development affects the
urban-rural income gap by influencing the level of urbanization, while rural infrastructure
development has a moderating effect. Finally, this paper puts forward corresponding advice for
narrowing the urban-rural income gap in China from the perspective of digital economy
development.
Key words: Digital Economy; Urban-Rural Income Gap; Common Prosperity

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