Mechanisms of Digital Economy Empowering High-Quality Development in Manufacturing: A Case Study of Hebei Province, a Traditional Manufacturing Powerhouse in China

The digital economy, a new economic paradigm guiding the rapid and optimal allocation of resources for high-quality economic development, has the potential to empower the high-quality advancement of the manufacturing sector. It is imperative to delve into the mechanisms underlying this empowerment. Utilizing panel data from nine cities in Hebei Province of China from 2010 to 2019, this study employs intermediary models and panel threshold models to empirically examine the mechanisms through which the digital economy enables high-quality development in Hebei's manufacturing industry across three dimensions: direct, indirect, and nonlinear. The findings are threefold: Firstly, the digital economy significantly fosters high-quality development in manufacturing. Secondly, mediation effect analyses reveal that the digital economy enhances high-quality development in manufacturing by elevating human capital levels and reducing operational costs for enterprises. Thirdly, panel threshold model analyses indicate that the efficacy of the digital economy in empowering high-quality manufacturing development varies in stages, contingent on different levels of digital infrastructure, research and development investment, and innovation. Specifically, the facilitative role of the digital economy in the high-quality development of manufacturing shows an 'increasing marginal effect' with elevated levels of research and development investment and a 'decreasing marginal effect' with the enhancement of digital infrastructure and innovation levels.