Bridging Digital Divides: An Empirical Analysis of the Digital Economy’s Impact on Sustainable Prosperity

Abstract

This study investigates the role of the digital economy in promoting sustainable prosperity across Chinese provinces from 2011 to 2020. The research develops an innovative theoretical framework that integrates resource-based view (RBV) and open innovation theories, examining how digital technologies contribute to economic growth, social equity, and efficient resource distribution. Utilizing a longitudinal panel analysis, we explore the direct and indirect effects of the digital economy on sustainable prosperity, focusing on the prosperity degree, equality degree, and sharing degree. Our findings show that the digital economy significantly enhances all three dimensions of sustainable prosperity, with coefficients of 0.693 for sustainable prosperity, 1.959 for prosperity degree, 2.048 for equality degree, and 1.360 for sharing degree, all statistically significant at the 1% level. Moreover, the study reveals the mediating roles of resource allocation efficiency and technological innovation in these effects, demonstrating how digitalization drives broader economic and social benefits. The results also underscore the potential of the digital economy to reduce regional disparities and foster urban-rural integration. This research contributes to the literature by combining RBV and open innovation theories with a spatial analysis, offering new insights into how digital transformation can promote inclusive and sustainable growth. The findings provide important implications for policymakers seeking to leverage digital technologies for balanced regional development.