Can digital economy promote urban export sophistication? Evidence from China

This study investigates the impact of digital economy development on urban export sophistication and its mechanisms. We use the chain mediation effect model to analyze the panel data of 281 cities in China from 2011 to 2017. The results show that the digital economy has a significant and positive impact on urban ES. There are two main influence paths. One promotes urban ES by accumulating human capital; the other stimulates technological innovation and further leads to urban ES. The "technological innovation effect" plays the most considerable mediating role among them. The heterogeneity test result shows that the digital economy impact is greater in western China than in eastern and central regions. We further show that the influence of the regional digital economy on urban ES presents an inverted U-shaped curve. Our paper provides guidance for promoting the construction of and the high-quality development of trade.