The Role of the Digital Economy in High-quality Development—A Perspective of Supply-demand Match

Vigorously developing the digital economy and promoting its integration with the real economy is a crucial strategic measure for encouraging modernization and high-quality development. Guided by the five-pronged development approach, this study presents a framework for high-quality development. The framework focuses on examining how the digital economy enables both supply and demand and advances high-quality development. The findings demonstrate a statistically significant positive effect of the digital economy on high-quality development. This conclusion remains valid when historical postal and telecommunications data, as well as the average level of digital economy development in other cities within the same province, are used as instrumental variables to address potential endogeneity issues. Mechanism tests reveal that the digital economy primarily operates through two channels: supply and demand. The digital economy leverages several functions, including optimizing the dynamic allocation of resources, guiding the cross-border flow of technology, generating new green consumption demands, and reshaping traditional consumption patterns. Consequently, there is a transformation in supply efficiency and an upgrade in demand structure. These changes propel supply and demand toward a higher level of dynamic, diverse, and complex equilibrium. Ultimately, this drives high-quality development. The study demonstrates how the digital economy enables high-quality development and provides valuable insights into integrating digital and real industries and regionally coordinating development.