Does digital infrastructure promote both growth and convergence? Evidence from China’s Broadband China Programme

This paper investigates whether digital infrastructure can simultaneously promote urban economic growth and regional convergence. Using panel data from 264 prefecture-level cities in China over 2005–2022, we exploit the staggered rollout of the Broadband China pilot policy as a quasi-natural experiment within a Barro-type growth framework. We find that digital infrastructure significantly promotes growth while accelerating regional convergence, with results robust to multiple sensitivity checks. Mechanism tests reveal three differentiated transmission channels: labour allocation optimization, technological innovation diffusion, and institutional environment improvement. Heterogeneity analysis from a factor agglomeration perspective shows that the growth effect is stronger in regions with higher technology and human capital agglomeration. For physical capital, however, lower-agglomeration regions exhibit stronger growth effects while higher-agglomeration regions exhibit stronger convergence effects. These findings provide empirical support for differentiated digital infrastructure investment strategies.