Digital economy: An innovation driver for total factor productivity

This study applied the pooled regression to examine the innovation-driven effects of digital economy on total factor productivity (TFP) in China based on the data including the provincial TFP calculated by the dual approach and the digital economy index proposed by the principal component analysis in this paper. The results show that the digital economy index has a positively nonlinear relationship with provincial TFP, and it demonstrates the digital economy acts as an innovation driver for the extensive and sustainable development of TFP. Nevertheless, there is a regional diversity that digital integration in eastern China accelerates the high-quality TFP growth, while they are relatively inferior in the central and western regions. The results provide valuable reference resources for the departments concerned to cross the regional barriers existing in technological information, launch a cooperative program, and construct a decentralised infrastructure.