Digital Economy Empowers Common Prosperity: Theoretical Basis, Mechanism and Space-Time Evolution

Abstract

Based on the provincial panel data of China from 2011 to 2020, we first fit the common prosperity index by using entropy weight method, then establishes a benchmark regression to explore the relationship between digital inclusive finance and common prosperity, and conducts a spatial expansion. The research results show that digital inclusive finance can help promote common prosperity, among which the dimension of coverage breadth is still the main driving force. However, at current stage, the development of digital inclusive finance in other provinces can only manage to improve the level of common prosperity in their own provinces, and cannot yet produce positive spillover effects on other provinces. Therefore, in order to achieve coordinated regional development and bridge the "digital divide", the development of digital inclusive finance should be transformed from the breadth of coverage to the depth of use as soon as possible, and while the western region is vigorously building digital infrastructure, the digitalization of the eastern region should be enhanced.