How Digital Infrastructure Promotes Foreign Direct Investment? Evidence from China

Amid the global digital paradigm shift and the urgent need to recalibrate traditional Foreign Direct Investment (FDI) theories, Digital Infrastructure Construction (DIC) has emerged as a strategic imperative for advancing high-level financial openness. Leveraging the “Broadband China” policy as a quasi-natural experiment, we investigate the effect of DIC on FDI based on a sample of 285 Chinese cities covering 2010–2023. The results demonstrate that DIC exerts a significant and positive influence on FDI inflows. Mechanism analysis identifies digital inclusive finance, regional entrepreneurial vitality, and carbon productivity as key channels mediating this relationship. Furthermore, we highlight a significant positive intra-city spillover. Heterogeneity tests reveal that the driving force of DIC is more pronounced within inland and southern regions, with the effect being especially salient in non-resource-based cities. We conclude with policy implications regarding regional coordination, market expansion, and dynamic monitoring mechanisms.