A Study on the Promotion Effect of the Digital Economy on Inter-provincial Trade: Also on Its Impact on Boundary Effects

Yang Wenpu; Xia Ting

doi:doi:10.16538/j.cnki.jsufe.2024.04.005

Summary

Against the backdrop of rising trade protectionism globally, China has proposed a new development paradigm characterized by a dual circulation mode, with the domestic economy forming the mainstay and the domestic and international economies mutually reinforcing each other. As an integral part of the domestic economy, inter-provincial trade plays a significant role in achieving high-quality economic development. In this context, this paper estimates the trade flow matrix data between provinces based on the gravity model of trade and the distribution coefficient method for transportation volume. Building on this, this paper examines the overall effect and specific mechanisms of the digital economy in promoting the circulation of inter-provincial trade, and further analyzes the role of the digital economy in reducing the boundary effects of inter-provincial trade. The findings indicate that: Firstly, spatially, inter-provincial trade is still predominantly concentrated in eastern coastal provinces, with western regions generally having a lower scale of trade inflow and outflow; temporally, there has been a relative decline in the scale of trade outflow and inflow in northeastern regions. Secondly, the digital economy not only significantly promotes inter-provincial trade outflow but also inflow, thereby enhancing the scale of inter-provincial trade, and the results remain significant after tests for endogeneity and robustness. Thirdly, the digital economy can reduce inter-provincial trade costs by optimizing logistics networks and improving supply-chain management efficiency, thus increasing the scale of inter-provincial trade. Additionally, the development of the digital economy lowers the cost of information search, breaks information asymmetry leading to regional monopolies and administrative barriers, and enhances the level of price integration, which in turn increases the scale of inter-provincial trade. However, trade activities in coastal areas are more susceptible to external environmental influences, so the mediating effect of price integration is not significant. Finally, while the digital economy can promote both inter-provincial and intra-provincial trade, its overall impact on reducing boundary effects is not apparent.