Digital Economy, Regional AI Orientation, and Industrial Structure Upgrading Under Economic Policy Uncertainty: Evidence from China

This study examines whether the digital economy helps provincial economies sustain industrial structure upgrading under economic policy uncertainty (EPU), and whether regional AI orientation strengthens this role. Using a balanced panel of 30 Chinese provinces from 2015 to 2023, the study uses the standardised logarithm of a provincial digital economy index as its core measure of digital development. Province and year fixed-effects models show that the triple interaction among digital economy development, regional AI orientation, and high EPU is positive and statistically significant. Marginal effect analysis indicates that the digital economy effect under high EPU only becomes positive when regional AI orientation exceeds a threshold, suggesting a conditional rather than universal effect. Robustness checks, alternative dependent variables, province-grouped machine learning validation, and supplementary policy exposure evidence based on Broadband China pilots are consistent with this state-dependent complementarity, although the estimates are interpreted as conditional associations rather than definitive causal effects.