Can digital economy development improve the coordination of IFDI and OFDI? evidence from 246 cities in China

This study examines the impact of digital economy development on the coordination of inward foreign direct investment (IFDI) and outward foreign direct investment (OFDI) in 246 Chinese cities from 2011 to 2020. Panel data analysis is used to measure the comprehensive development index of the digital economy and the coupling and coordination of IFDI and OFDI. The results show that digital economy development significantly promotes the coordination of IFDI and OFDI, even after conducting various robustness tests. The study also finds that technological innovation plays a mediating role in the relationship between digital economy development and the coordination of IFDI and OFDI. Additionally, the research reveals that the enhancing effect of digital economy development on the coordination of IFDI and OFDI is stronger in the eastern regions and the five major urban agglomerations. This study contributes to the understanding of the role of the digital economy in promoting the coordination of IFDI and OFDI and provides practical implications for policymakers to enhance such coordination in cities.