Can linguistic big data empower digital economy?: Evidence from China

Abstract

The paper develops a theoretical framework and provides empirical evidence to illuminate the impact of linguistic big data on shaping the digital economy. Using a value-added accounting method, we quantify the scale of the digital economy and develop an econometric model to empirically evaluate its growth driven by linguistic big data. Our findings highlight the pivotal role of linguistic big data in mitigating resource mismatches caused by information asymmetry, enhancing the efficiency of supply-demand dynamics in online trading markets, and expanding the transactional reach of the digital economy. Furthermore, our analysis reveals notable heterogeneity in the impact of linguistic big data across different regions and sectors. Specifically, its influence is more pronounced in eastern China and has a greater effect on digital industrialization compared to industrial digitalization. Additionally, its impact on the digital service industry is more substantial than the impact on digital manufacturing sector. This study carries important implications and offers valuable policy insights for fostering the advancement of the digital economy. These insights can inform strategic initiatives that leverage linguistic big data to drive the growth of the digital economy.