Research on the Effect of Digital Economy Development on Local Financial Pressure


  • Baolin Song School of management, Hebei University, Baoding, China
  • Xinrui Hu School of management, Hebei University, Baoding, China
  • Hang Zhang School of management, Hebei University, Baoding, China
  • Yanchen Gao Political Economics, King's College London, London, UK
  • Yuan Guo School of Economics and Management, Cangzhou Jiaotong College, Cangzhou, China



Digital economy; Local financial pressure; Fiscal revenue; Degree of entrepreneurial activity


The vigorous development of the digital economy provides a new research perspective for alleviating local financial pressure. Based on the provincial panel data from 2013 to 2020, the mediating effect model and threshold regression model were used to explore the effect and mechanism of the digital economy on local fiscal pressure. The research shows that the digital economy has a significant alleviating effect on local financial pressure by increasing fiscal revenue, and this alleviating effect has a threshold effect on entrepreneurial activity. From the perspective of dimension, the alleviating effect of the digital economy development environment on local financial pressure is better than that of digital industrialization and industrial digitization. From a regional perspective, the digital economy has the most apparent impact on the western region. In addition, the quantile regression results show that with the increase in financial pressure, the easing effect of the digital economy shows an inverted U-shaped change. Therefore, in order to effectively alleviate the financial pressure on local governments, China should continue to promote the development of the digital economy, take multiple measures to increase entrepreneurial activity, and encourage various regions to implement differentiated digital economy development strategies according to local conditions.


Abdurakhmanova, G., Rustamov, D., Shayusupova, N. and Irmatova, A. (2020). The role of the digital economy in the development of the human capital market. International Journal of Psychological Rehabilitation 24(7), 8043-8051.

Ahmad, N. and Ribarsky, J. (2018). Towards a framework for measuring the digital economy. 16th Conference of the International Association of Official Statisticians 1-33.

Akdogan, M. U. (2021). Digital Service Taxes as the Fiscal Result of Digital Transformation. Financial Ecosystem and Strategy in the Digital Era. Springer, Cham 355-378.

Askerov, P. F., Medvedeva, A. M., Rabadanov, A. R., Bogdanova, I. M. and Zvezdichev, G. J. (2018). Digital Economy as a priority direction for the development of modern innovative entrepreneurship in Russia. Espacios 39(41), 30-39.

Bai, J., Lu, J. and Li, S. (2019). Fiscal pressure, tax competition and environmental pollution. Environmental and resource economics 73(2), 431-447.

Barefoot, K., Curtis, D., Jolliff, W., Nicholson, J. R. and Omohundro, R. (2018). Defining and measuring the digital economy. US Department of Commerce Bureau of Economic Analysis: Washington, DC, USA 6-11.

Bauer, G., Fritz, J., Schanz, D. and Sixt, M. (2019). Corporate income tax challenges arising from digitalised business models. Available at SSRN 3348544. 10.2139/ssrn.3348544

Bowman, J. P. (1996). The digital economy: promise and peril in the age of networked intelligence, 69-71.

Braesemann, F., Lehdonvirta, V. and Kässi, O. (2022). ICTs and the urban-rural divide: can online labour platforms bridge the gap? Information, Communication & Society 25(1), 34-54.

Bukht, R. and Heeks, R. (2018). Defining, conceptualising and measuring the digital economy. International Organisations Research Journal 13(2), 143-172. 10.17323/1996-7845-2018-02-07

Bulturbayevich, M. B. and Jurayevich, M. B. (2020). The impact of the digital economy on economic growth. International Journal of Business, Law, and Education 1(1), 4-7.

Chakpitak, N., Maneejuk, P., Chanaim, S. and Sriboonchitta, S. (2018). Thailand in the era of digital economy: How does digital technology promote economic growth? International Conference of the Thailand Econometrics Society. Springer, Cham 350-362.

Dahlman, C., Mealy, S. and Wermelinger, M. (2016). Harnessing the digital economy for developing countries. OECD Development Centre Working Papers (334), 1.

Ding, C., Liu, C., Zheng, C. and Li, F. (2021). Digital economy, technological innovation and high-quality economic development: Based on spatial effect and mediation effect. Sustainability 14(1), 216.

Guo, Y. M., and Shi, Y. R. (2021). Impact of the VAT reduction policy on local fiscal pressure in China in light of the COVID-19 pandemic: A measurement based on a computable general equilibrium model. Economic Analysis and Policy 69, 253–264.

Khomenko, V. V. and Ruzhnikov, E. A. (2019). Impact of the Digital Economy on Investment Projects. Proceedings of the 2019 International SPBPU Scientific Conference on Innovations in Digital Economy 1-7.

Kokh Larisa, V. and Kokh Yuriy, V. (2019). Analysis of existing approaches to measurement of digital economy. π-Economy 78(4), 78-89.

Kou, P. and Han, Y. (2021). Vertical environmental protection pressure, fiscal pressure, and local environmental regulations: evidence from China's industrial sulfur dioxide treatment. Environmental Science and Pollution Research 28(42), 60095-60110.

Kuckertz, A., Berger, E. S. C. and Mpeqa, A. (2016). The more the merrier? Economic freedom and entrepreneurial activity. Journal of Business Research 69(4), 1288-1293.

Kuzmina, M., Avdeyuk, O., Kuzmina, C., Tarasova, I. and Rayushkina, A. (2020). Strategy of development of regional infrastructure for creating innovative production complexes in the digital economy. Digital Future Economic Growth, Social Adaptation, and Technological Perspectives. Springer, Cham 31-37.

Li, J. (2015). Protecting the tax base in a digital economy. United Nations Handbook on Selected Issues in Protecting the Tax Base of Developing Countries 26-32.

Lin, B. and Zhou, Y. (2021). How does vertical fiscal imbalance affect the upgrading of industrial structure? Empirical evidence from China. Technological Forecasting and Social Change 170, 120886.

Lu, Z., Wu, J., Li, H. and Nguyen, D. K. (2022). Local bank, digital financial inclusion and SME financing constraints: Empirical evidence from China. Emerging Markets Finance and Trade 58(6), 1712-1725.

Makin, A. J. and Layton, A. (2021). The global fiscal response to COVID-19: Risks and repercussions. Economic Analysis Policy 69, 340-349.

Malerba, F. and Lee, K. (2021). An evolutionary perspective on economic catch-up by latecomers. Industrial and Corporate Change 30(4), 986-1010.

Mardonakulovich, B. M. and Bulturbayevich, M. B. (2020). Economic growth: quality and the digital economy. Academicia Globe: Inderscience Research 1(01), 1-8.

Mesenbourg, T. L. (2001). Measuring the digital economy. US Bureau of the Census 1, 1-19.

Mützel S. (2021). Unlocking the payment experience: Future imaginaries in the case of digital payments. New Media & Society 23(2), 284-301.

Ogli, N. S. F. and Ogli, R. B. O. (2021). In The Context of Developing the Digital Economy Modern Forms of Employment. Eurasian Scientific Herald 1(1), 11-16.

Ogli, N. S. F. and Ogli, R. B. O. (2021). The Digital Economy is The Basis For Forming A Favorable Investment Environment. Eurasian Scientific Herald 1(1), 1-5.

Olbert, M. and Spengel, C. (2017). International taxation in the digital economy: challenge accepted. World Tax Journal 9(1), 3-46.

Pan, W., Xie, T., Wang, Z. and Ma, L. (2022). Digital economy: An innovation driver for total factor productivity. Journal of Business Research 139, 303-311.

Peng, W. (2016). Multinational tax base erosion problem of the digital economy. Modern Economy 7(03), 345-352.

Popkova, E. G. and Gulzat, K. (2019). Contradiction of the digital economy: public well-being vs. cyber threats. Institute of Scientific Communications Conference. Springer, Cham 112-124.

Popkova, E. G., Zhuravleva, I. A., Abramov, S. A., Fetisova, O. V. and Popova, E. V. (2019). Digitization of taxes as a top-priority direction of optimizing the taxation system in modern Russia. Optimization of the Taxation System: Preconditions, Tendencies and Perspectives. Springer, Cham 169-175.

Rybakova, E. V. and Nazarov, M. A. (2021). Entrepreneurship in digital era: prospects and features of development. Current achievements, challenges and digital chances of knowledge based economy. Springer, Cham 105-112.

Sadovaya, E. S. (2019). Digital economy and a new paradigm of the labor market. Mirovaia ekonomika i mezhdunarodnye otnosheniia 62(12), 35-45.

Sahut, J. M., Iandoli, L. and Teulon, F. (2021). The age of digital entrepreneurship. Small Business Economics 56(3), 1159-1169.

Stel, A., Carree, M. and Thurik, R. (2005). The effect of entrepreneurial activity on national economic growth. Small Business Economics 24(3), 311-321.

Su, J., Su, K. and Wang, S. (2021). Does the digital economy promote industrial structural upgrading?—A test of mediating effects based on heterogeneous technological innovation. Sustainability 13(18), 10105.

Sultana, S., Akter, S., Kyriazis, E. and Wamba, S. F. (2021). Architecting and developing big data-driven innovation (DDI) in the digital economy. Journal of Global Information Management (JGIM) 29(3), 165-187.

Terada-Hagiwara, A., Gonzales, K. and Wang, J. (2019). Taxation Challenges in a Digital Economy—The Case of the People’s Republic of China 2-3.‑2

Tianyu, L. and Tongwei, D. (2021). Vertical fiscal imbalance, transfer payments, and fiscal sustainability of local governments in China. International Review of Economics & Finance 74, 392-404.

Urinovich, K. A., Qobiljonovich, R. O., Baxtiyorvich, R. S. and Ogli, A. M. M. (2021). Modern content and concept of digital economy. ACADEMICIA: An International Multidisciplinary Research Journal 11(11), 829-832. 10.5958/2249-7137.2021.02523.4

Vovchenko, N. G., Andreeva, A. V., Orobinskiy, A. S. and Filippov, Y. M. (2017). Competitive advantages of financial transactions on the basis of the blockchain technology in digital economy. European Research Studies 20(3B), 193-212.

Wang, M., Yin, Z., Pang, S. and Li, Z. (2021). Does Internet development affect urban-rural income gap in China? An empirical investigation at provincial level. Information Development 02666669211035484.

Yang, G., Zou, L., Yue, Z., Wang, H. and Ding, Z. (2022). Fiscal Pressure and Local Government Public Service Expenditure Bias: A Quasi-Natural Experimental Analysis Based on China's Large-Scale Tax Reduction. Available at SSRN 4145349.

Zhang, W., Zhao, S., Wan, X. and Yao, Y. (2021). Study on the effect of digital economy on high-quality economic development in China. PloS one 16(9), e0257365.




How to Cite

Song, B., Hu, X., Zhang, H., Gao, Y., & Guo, Y. (2023). Research on the Effect of Digital Economy Development on Local Financial Pressure. Journal of Economic Statistics, 1(1), 77–93.