The Impact of the Digital Economy on Regional Economic Growth: Evidence of North–South Heterogeneity

Abstract

The digital economy has become a core driver of economic growth; however, the regional heterogeneity of its economic effects has not been sufficiently examined. Using panel data from Hangzhou and Tianjin covering the period 2015–2024, this study investigates the impact of digital economy development on regional economic growth and explores potential north–south heterogeneity. A series of econometric models, including pooled ordinary least squares (OLS), individual fixed-effects models, and interaction term models, are employed. In addition, visualization analysis and robustness tests are conducted to ensure the reliability of the empirical results. The findings indicate that the digital economy exerts a significant positive effect on regional economic growth. This effect remains robust after controlling for city-specific fixed effects and demonstrates a short-term lagged growth effect. Furthermore, considerable north-south disparity is evident. Tianjin, in particular, experiences a notable immediate positive impact from the development of the digital economy, while Hangzhou displays a more substantial overall and delayed effect, implying that the digital economy’s capacity to stimulate growth is more enduring in the southern region. The core findings are corroborated by robust checks, including the exclusion of the 2020 COVID-19 shock. Multicollinearity diagnostics also support the reliability of the estimated positive effects of the digital economy. This study provides dual-case empirical evidence on the heterogeneous regional growth effects of the digital economy and offers policy implications for designing differentiated digital economy development strategies and promoting balanced regional development between northern and southern China.