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Amid intensifying global economic rivalries, China has pinpointed the digital economy and sustainable growth as key accelerators for societal and economic progress. Digital innovation (DI) plays a crucial role in propelling China’s economy towards sustainable growth, by serving as the technological backbone of the digital economy. This study explores how DI influences China’s GTFP through an analysis of panel data covering 30 provinces, municipalities, and autonomous regions from 2005 to 2021. The results indicate that DI greatly contributes to the enhancement of GTFP. DI can also indirectly promote GTFP by increasing the effectiveness of factor allocation efficiency including capital, labor, and technology. Heterogeneity analysis results indicate that the influence of DI on GTFP differs depending on the degree of intellectual property protection (IPP), the development of digital infrastructure construction (DIC), and the geographical location. A higher degree of IPP and developed DIC make areas better suited for the role of DI in advancing GTFP. Furthermore, in the central and eastern areas, the impact of the digital economy on the promotion of GTFP is particularly noticeable. This study offers reliable empirical evidence for the effect of DI on GTFP and contributes to China’s digital economy and sustainable development.
Rao et al. (Tue,) studied this question.