Digital Economy Enabling the Upgrading of Industrial Structure: Demand Promoting and Supply Optimization

With the development of information technology, digital economy has risen rapidly and becomes a new round of industrial competition. It is also an important driving force for kinetic energy conversion. This paper bases on the influencing factors of digital economy, using combination of subjective and objective methods to construct a comprehensive index system to measure the development level of digital economy from four dimensions. Then, this paper uses inter-provincial panel data from 2013 to 2019 to examine the impact and mechanism of digital economy on the upgrading of industrial structure. There are three findings in this study. Firstly, the digital economy has a significant positive effect on promoting the upgrading of industrial structure. Secondly, the influence of digital economy on the upgrading of industrial structure has regional heterogeneity. The impact of the digital economy on the upgrading of industrial structure in the eastern region is higher than that on the central and western region. Thirdly, mechanism analysis shows that, by empowering both the production and demand, digital economy improves production efficiency, transforms consumption patterns, and thus promotes the upgrading of industrial structure. This research provides a new perspective for China to develop digital economy and also provides empirical evidence for improving the upgrading of industrial structure.