The Impact of Digital Infrastructure Development on the Consumption Upgrade of the Population

Abstract

Building new infrastructure, which is embodied in digital infrastructure, has a major influence on China's economy's quality of development while also having a major effect on the upgrading of citizens' consumption. This paper uses the entropy weight method to synthesize the composite index of residents' consumption upgrading and the composite index of digital infrastructure construction based on panel data from 31 Chinese provinces from 2011 to 2020. Then, it applies the two-way fixed effect model to study and analyze the relationship between residents' consumption upgrading and the development of digital infrastructure. The results of the study show that, firstly, the construction of digital infrastructure is conducive to enhancing residents' consumption upgrading, and passes the stability test and endogeneity test. Second, the mediating effect analysis shows that digital infrastructure construction promotes residents' consumption upgrading through industrial structure upgrading and increasing income level. Third, the promoting effect of digital infrastructure construction on residents' consumption upgrading is more significant for residents with lower levels of population aging, higher levels of innovation, and residents in the western region. Given this, it is recommended that digital infrastructure development is further developed to optimize the impact of digital infrastructure development on residents' consumption upgrading and to promote residents' consumption upgrading.