The impact of digitalization on urban sustainable development – An economic perspective

Abstract

Previous studies have suggested that the application of digital technology has certain impact on urban economy. The role of urban digitalization has been reflected in many policies in order to promote sustainable urban economy. It is considered important to clarify the mechanism of digitalization's impacts on sustainable urban development from an economic perspective. The mechanism is interpreted by designing and testing four research hypotheses based on two related theories. The PLS-SEM model is employed for the validation of the hypotheses by applying the data collected from 35 typical Chinese cities for the period of 2017 to 2021. The main findings are summarized as follows: (1) Digitalization can drive urban economic sustainability through promoting innovation, stimulating living consumption, and increasing human resources vitality. (2) Human resources vitality is the strongest mediator to affect the digitalization's contribution to economic sustainability. (3) The mediator of innovation is more influential in large cities, whilst the mediator of living consumption is more influential in small-medium cities. Therefore, cities of different sizes should choose different policies to promote economic sustainability in the digital age, such as strengthening digital infrastructure, encouraging human resource flow and innovation. However, the small number of samples limits the in-depth comparative analysis.