The Impact of Digital Economy Development on Residents' Consumption

Research Article
Open access

The Impact of Digital Economy Development on Residents' Consumption

Yuting Huang 1 , Jiameng Lin 2*
  • 1 Beijing Wuzi University, Beijing BJ 101149, China    
  • 2 Beijing Wuzi University, Beijing BJ 101149, China    
  • *corresponding author jiamenglinn@163.com
Published on 21 March 2023 | https://doi.org/10.54254/2754-1169/4/20221038
AEMPS Vol.4
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-915371-17-1
ISBN (Online): 978-1-915371-18-8

Abstract

In recent years, the digital economy’s development has affected all aspects of society, of which residential consumption is a very important part. Currently, domestic research of the digital economy on consumption is on the rise, but most of the current research is theoretical analysis, lacking empirical results and related impact mechanisms. Based on the data of China Family Panel Studies (CFPS) in 2010 and 2014, this paper uses the "Broadband China" strategy released in 2013 as a natural experiment of the digital economy, and applies the difference-in-difference (DID) method to estimate the digital economy’s impact on the consumption of residents. The study finds that the development of the digital economy has a significant positive effect on residents' consumption, mainly through three paths: social capital, human capital and income effect. The examination of heterogeneity reveals that the central region, urban residents, the middle and high education level, and the middle income group are the main beneficiaries of the digital economy's promotion of consumption, and the further study finds that the digital economy’s impact on residents' consumption is concentrated on subsistence consumption.

Keywords:

Mediating Effect., Difference-in-difference, Residential Consumption, Digital Economy

Huang,Y.;Lin,J. (2023). The Impact of Digital Economy Development on Residents' Consumption. Advances in Economics, Management and Political Sciences,4,115-139.
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References

[1]. Qi, Y.D., Tsai, C.W.: The nature of digital firms:An economic explanation[J]. Research on Finance and Economics,2019,(05):121-129.

[2]. Strassner, E, Nicholson, J.: Measuring the digital economy in the United States.[J].Statistical Journal of the IAOS.2020,Vol.36(No.3). 647-655.

[3]. Brynjolfsson, E, Collis, A.: How Should We Measure the Digital Economy?[J].Harvard Business Review.2019,Vol.97(No.6):140-148.

[4]. Barefoot, K., Curtis, D., Jolliff, W.A., Nicholson, J.R., Omohundro, R.: Research Spotlight Measuring the Digital Economy.[J]. Survey of Current Business.2019,Vol.99(No.5):1-13.

[5]. Xu, X.C., Zhang, M.H.: A study on measuring the size of China's digital economy--based on the perspective of international comparison[J]. China Industrial Economy, 2020,(05):23-41.

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[7]. Song, Y., Escobar, O., Arzubiaga, U., Alfredo, D.M.: The digital transformation of a traditional market into an entrepreneurial ecosystem[J ].Review of Managerial Science.2022,Vol.16(No.1):65-88.

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[13]. Zhang, J., Chen, L.Y.: The impact of rural e-commerce development on consumption gap between urban and rural residents and its variability--a comparison based on regional variability[J]. Business Economics Research,2021,(02):46-49.

[14]. Li, J., Xing, W.: E-commerce market development and urban-rural consumption convergence in China - an analytical perspective of search matching[J]. Economic Theory and Economic Management,2020,(02):103-112.

[15]. Li, L.M., Wu, Q., Nie X.H.: Can e-commerce narrow the consumption gap between urban and rural residents? [J]. Technology Economics,2020,39(02):125-133.

[16]. Li, J., Cheong T.S., Shen, J.F.& Fu, D.H.: Urbanization and Rural-Urban Consumption Disparity: Evidence From China[J].The Singapore Economic Review (SER).2019,Vol.64(No.4):983-996.

[17]. Zhang, X., Wan, G.H., Zhang, J.J., He, Z.Y.: Digital Economy, Financial Inclusion and Inclusive Growth.[J].China Economist.2020, Vol.15(No.3):92-105.

[18]. Lin, X., X, J.Y., Lin, S.S.: Research on the impact of mobile Internet use on different consumption categories of rural households--an empirical analysis based on CFPS data in 2018[J]. Lanzhou Journal,2022,(02):113-123.

[19]. Chimere, O.I., Nwachukwu, T.: Macroeconomic determinants of household consumption in selected West African countries[J]. Bulletin.2020,Vol.40(No.2):1596-1606.

[20]. Charron-Chénier, R., Fink Joshua J., Lisa, A. K.: Race and Consumption:Black and White Disparities in Household Spending[J]. Race and Ethnicity.2017,Vol.3(No.1):50-67.

[21]. Yu, J., Shi, X.P., Cheong, T. S.: Distribution dynamics of China's household consumption upgrading[J].Structural Change and Economic Dynamics.2021:193-203.

[22]. Feng, F.S.: A test of the channel effect of rural e-commerce development on farmers' consumption upgrade[J]. Business Economics Research,2020,(23):133-135.

[23]. Wang, C.Y.: Synergistic development of rural e-commerce and consumption upgrading of rural residents[J]. Business Economics Research,2020,(15):82-85.

[24]. Lin, X.S.: New consumption and digital life: perspectives on the consumption revolution[J]. Social Science Series,2022,(01):36-45+209.

[25]. Ma, X.P.: The change of residents' consumption in the era of digital economy: trends, characteristics, mechanisms and patterns[J]. Financial Science,2020,(01):120-132.

[26]. Ma, Y.: The impact of digital economy on consumer market: mechanism, performance, problems and countermeasures[J]. Macroeconomic Research,2021,(05):81-91.

[27]. Liu, G.B., Zhang, S.Q.: The digital economy empowers consumption: theoretical mechanisms and micro evidence[J]. Consumer Economics,2022,38(01):72-82.

[28]. Huang, Y.T., Liu, Y.S.: Internet development, distribution specialization and residential consumption expansion[J]. Business Economics and Management,2021,(06):5-16.

[29]. Song, S.F., Quan, S.: Online Consumption and Income Efficiency: Evidence from China[J].The Chinese Economy.2020,Vol.53(No.6):465-476.

[30]. Shu, Z., Feng, L., Jing, J.X.: Internet penetration and consumption inequality in China[J].International Journal of Consumer Studies.2020, Vol.44(No.5):407-422.

[31]. Ambrus, A., Mobius, M., & Szeidl, A.: Consumption Risk-Sharing in Social Networks[J].The American Economic Review.2014,Vol.104(No.1):149 -182.

[32]. Yang, Y.G., Jiang, J.L., Yina, Z.C.: Social networks, shocks, and household consumption in China[J].Economic Analysis and Policy.2021,Vol.71. 111-122.

Cite this article

Huang,Y.;Lin,J. (2023). The Impact of Digital Economy Development on Residents' Consumption. Advances in Economics, Management and Political Sciences,4,115-139.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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About volume

Volume title: Proceedings of the 6th International Conference on Economic Management and Green Development (ICEMGD 2022), Part Ⅱ

ISBN：978-1-915371-17-1(Print) / 978-1-915371-18-8(Online)
Editor：Canh Thien Dang, Javier Cifuentes-Faura
Conference website: https://www.icemgd.org/
Conference date: 6 August 2022
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.4
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. Qi, Y.D., Tsai, C.W.: The nature of digital firms:An economic explanation[J]. Research on Finance and Economics,2019,(05):121-129.

[2]. Strassner, E, Nicholson, J.: Measuring the digital economy in the United States.[J].Statistical Journal of the IAOS.2020,Vol.36(No.3). 647-655.

[3]. Brynjolfsson, E, Collis, A.: How Should We Measure the Digital Economy?[J].Harvard Business Review.2019,Vol.97(No.6):140-148.

[4]. Barefoot, K., Curtis, D., Jolliff, W.A., Nicholson, J.R., Omohundro, R.: Research Spotlight Measuring the Digital Economy.[J]. Survey of Current Business.2019,Vol.99(No.5):1-13.

[5]. Xu, X.C., Zhang, M.H.: A study on measuring the size of China's digital economy--based on the perspective of international comparison[J]. China Industrial Economy, 2020,(05):23-41.

[6]. Xiao, X., Qi, Y.D.: Value dimension and theoretical logic of industrial digital transformation[J]. Reform,2019(08):61-70.

[7]. Song, Y., Escobar, O., Arzubiaga, U., Alfredo, D.M.: The digital transformation of a traditional market into an entrepreneurial ecosystem[J ].Review of Managerial Science.2022,Vol.16(No.1):65-88.

[8]. Wen, H.W., Lee, C.C., Song, Z.Y.: Digitalization and environment: how does ICT affect enterprise environmental performance?[J]. Environmental science and pollution research international.2021,Vol.28(No.39):54826-54841.

[9]. Kevin, J.S.: Are ICT spillovers driving the new economy?[J].Review of Income and Wealth.2002,Vol.48(NO.1):33-58.

[10]. Marsh, I.W., Rincon-Aznar, A., Vecchi, M., Venturini, F.: We see ICT spillovers everywhere but in the econometric evidence: a reassessment[J].Industrial and Corporate Change.2017,Vol.26(No.6):1067-1088.

[11]. Czernich, N., Falck, O., Kretschmer, T., Woessmann, L.: Broadband Infrastructure and Economic Growth[J].The Economic Journal.2011,Vol.121(No.552):505-532.

[12]. Jing, W.J., Sun, B.W.: Digital economy for high-quality economic development:A theoretical analysis framework[J]. The Economist,2019,(02):66-73.

[13]. Zhang, J., Chen, L.Y.: The impact of rural e-commerce development on consumption gap between urban and rural residents and its variability--a comparison based on regional variability[J]. Business Economics Research,2021,(02):46-49.

[14]. Li, J., Xing, W.: E-commerce market development and urban-rural consumption convergence in China - an analytical perspective of search matching[J]. Economic Theory and Economic Management,2020,(02):103-112.

[15]. Li, L.M., Wu, Q., Nie X.H.: Can e-commerce narrow the consumption gap between urban and rural residents? [J]. Technology Economics,2020,39(02):125-133.

[16]. Li, J., Cheong T.S., Shen, J.F.& Fu, D.H.: Urbanization and Rural-Urban Consumption Disparity: Evidence From China[J].The Singapore Economic Review (SER).2019,Vol.64(No.4):983-996.

[17]. Zhang, X., Wan, G.H., Zhang, J.J., He, Z.Y.: Digital Economy, Financial Inclusion and Inclusive Growth.[J].China Economist.2020, Vol.15(No.3):92-105.

[18]. Lin, X., X, J.Y., Lin, S.S.: Research on the impact of mobile Internet use on different consumption categories of rural households--an empirical analysis based on CFPS data in 2018[J]. Lanzhou Journal,2022,(02):113-123.

[19]. Chimere, O.I., Nwachukwu, T.: Macroeconomic determinants of household consumption in selected West African countries[J]. Bulletin.2020,Vol.40(No.2):1596-1606.

[20]. Charron-Chénier, R., Fink Joshua J., Lisa, A. K.: Race and Consumption:Black and White Disparities in Household Spending[J]. Race and Ethnicity.2017,Vol.3(No.1):50-67.

[21]. Yu, J., Shi, X.P., Cheong, T. S.: Distribution dynamics of China's household consumption upgrading[J].Structural Change and Economic Dynamics.2021:193-203.

[22]. Feng, F.S.: A test of the channel effect of rural e-commerce development on farmers' consumption upgrade[J]. Business Economics Research,2020,(23):133-135.

[23]. Wang, C.Y.: Synergistic development of rural e-commerce and consumption upgrading of rural residents[J]. Business Economics Research,2020,(15):82-85.

[24]. Lin, X.S.: New consumption and digital life: perspectives on the consumption revolution[J]. Social Science Series,2022,(01):36-45+209.

[25]. Ma, X.P.: The change of residents' consumption in the era of digital economy: trends, characteristics, mechanisms and patterns[J]. Financial Science,2020,(01):120-132.

[26]. Ma, Y.: The impact of digital economy on consumer market: mechanism, performance, problems and countermeasures[J]. Macroeconomic Research,2021,(05):81-91.

[27]. Liu, G.B., Zhang, S.Q.: The digital economy empowers consumption: theoretical mechanisms and micro evidence[J]. Consumer Economics,2022,38(01):72-82.

[28]. Huang, Y.T., Liu, Y.S.: Internet development, distribution specialization and residential consumption expansion[J]. Business Economics and Management,2021,(06):5-16.

[29]. Song, S.F., Quan, S.: Online Consumption and Income Efficiency: Evidence from China[J].The Chinese Economy.2020,Vol.53(No.6):465-476.

[30]. Shu, Z., Feng, L., Jing, J.X.: Internet penetration and consumption inequality in China[J].International Journal of Consumer Studies.2020, Vol.44(No.5):407-422.

[31]. Ambrus, A., Mobius, M., & Szeidl, A.: Consumption Risk-Sharing in Social Networks[J].The American Economic Review.2014,Vol.104(No.1):149 -182.

[32]. Yang, Y.G., Jiang, J.L., Yina, Z.C.: Social networks, shocks, and household consumption in China[J].Economic Analysis and Policy.2021,Vol.71. 111-122.

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