Digital infrastructure and economic growth—Evidence for China

An ZHOU

Article ID: 1397
Vol 6, Issue 1, 2022, Article identifier:1397

VIEWS - 143 (Abstract) 79 (PDF)

Abstract


China’s economic structure has made subtle changes with the development of digital economy. Along with the marginal diminishing effect of Chinese monetary policies and the increase of the overall leverage ratio, the Chinese economic growth mode of relying on real estate, trade and infrastructure construction in the past will not be sustainable in the next decade. This paper makes a theoretical analysis on the reduction of the search cost in digital economy. Also, this paper used empirical methods to study the relationship between China’s economic growth and digital infrastructure construction. In conclusion, the digital economy has reduced the search cost for people, and big data will become a product factor participating in labor distribution. In addition, this paper proposes for the first time that digital economy can effectively restrain inflation. The Chinese government needs to attach importance to the issue that current internet enterprise oligarchs will probably monopolize the usage of big data in the development of digital economy in the future and become the obstacle to effective economic growth. In addition, close attention should be paid to the vulnerabilities of financial and taxation systems for digital economic entities to avoid continuous disguised tax subsidies to internet oligarchs, thus preventing industrial monopoly.


Keywords


digital infrastructure; digital economy; economic growth

Full Text:

PDF

References


Agrawal DR and Fox WF (2021). “Taxing goods and services in a digital era”. National Tax Journal, 74(1): 257–301. https://doi.org/10.1086/712913

Athey S, Catalini C and Tucker CE (2017). The Digital Privacy Paradox: Small Money, Small Costs, Small Talk (NBER Working Paper 23488). National Bureau of Economic Research. https://doi.org/10.3386/w23488

Borenstein S and Saloner G (2001). “Economics and electronic commerce”. Journal of Economic Perspectives, 15(1): 3–12. https://doi.org/10.1257/jep.15.1.3

Brynjolfsson E, Collis A, Diewert WE, et al. (2019). GDP-B: Accounting for the Value of New and Free Goods in the Digital Economy (NBER Working Paper 25695). National Bureau of Economic Research. https://doi.org/10.3386/w25695

Brynjolfsson E, Hu YJ and Smith MD (2003). “Consumer surplus in the digital economy: Estimating the value of increased product variety at online booksellers”. Management Science, 49(11): 1580–1596. https://doi.org/10.1287/mnsc.49.11.1580.20580

Brynjolfsson E and Oh J (2012). “The attention economy: Measuring the value of free digital services on the Internet”. ICIS 2012 Proceedings.

Ding Y, Zhang H and Tang S (2021). “How does the digital economy affect the domestic value-added rate of Chinese exports?” Journal of Global Information Management, 29(5): 71–85. https://doi.org/10.4018/JGIM.20210901.oa5

Fink L, Shao J and Lichtenstein Y (2020). “The ownership of digital infrastructure: Exploring the deployment of software libraries in a digital innovation cluster”. Journal of Information Technology, 35(2): 1–19. https://doi.org/10.1177/0268396220936705

Fudenberg D and Villas-Boas JM (2012). “Price discrimination in the digital economy”. In: Peitz M and Waldfogel J (Eds.), Oxford Handbook of the Digital Economy, pp. 254–272. Oxford University Press. https://doi.org/10.1093/oxfordhb/9780195397840.013.0010

Goldfarb A and Tucker C (2019). “Digital economics”. Journal of Economic Literature, 57(1): 3–43. https://doi.org/10.1257/jel.20171452

Goolsbee AD and Klenow PJ (2018). Internet Rising, Prices Falling: Measuring Inflation in a World of E-Commerce (NBER Working Paper 24649). National Bureau of Economic Research. https://doi.org/10.3386/w24649

Hesketh T, Lu L and Xing ZW (2005). “The effect of China’s one-child family policy after 25 years”. New England Journal of Medicine, 353(11): 1171–1176. https://doi.org/10.1056/NEJMhpr051833

Jiang Y, Long H and Tang Y (2021). “Land consolidation and rural vitalization: A perspective of land use multifunctionality”. Progress in Geography, 40(3): 487–497. https://doi.org/10.18306/dlkxjz.2021.03.012

Smith MD, Bailey J and Brynjolfsson E (2002). “Understanding digital markets”. In: Brynjolfsson E and Kahin B (Eds.), Understanding the Digital Economy: Data, Tools, and Research, pp. 487–490. MIT Press. https://doi.org/10.7551/mitpress/6986.003.0007

Song Z, Storesletten K and Zilibotti F (2011). “Growing like China”. American Economic Review, 101(1): 196–233. https://doi.org/10.1257/aer.101.1.196

Stigler GJ (1961). “The economics of information”. Journal of Political Economy, 69(3): 213–225. https://doi.org/10.1086/258464

Stiglitz JE (1987). “Competition and the number of firms in a market: Are duopolies more competitive than atomistic markets?” The Journal of Political Economy, 95(5): 1041–1061. https://doi.org/10.1086/261501




DOI: http://dx.doi.org/10.24294/jipd.v6i1.1397

Refbacks

  • There are currently no refbacks.


Copyright (c) 2022 An ZHOU

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Creative Commons License
This site is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.