Research on the Impact of Digital Infrastructure on Urban-rural Income Gap from the Perspective of Common Prosperity

Purpose/Significance Common prosperity is the essential requirement of socialism with Chinese characteristics. Promoting urban and rural development and narrowing the urban-rural income gap is an important part of achieving common prosperity. From the perspective of digital infrastructure construction, this study is to solve the problem of unbalanced urban and rural development and achieve common prosperity. Design/Methodology Based on the perspective of digital divide, this study analyzes the impact and mechanism of digital infrastructure construction on urban-rural income gap, constructs an index evaluation system of digital infrastructure construction, and uses two-way fixed effect model and panel threshold model to investigate the impact, mechanism and heterogeneity of digital infrastructure construction on urban-rural income gap. Conclusions/Findings The digital infrastructure has widened the urban-rural income gap and passed a series of robustness tests. An in-depth analysis of the mechanism finds that due to the existence of digital divide, digital infrastructure is conducive to improving the per capita disposable income of urban residents, however, the promotion effect on the per capita net income of rural residents has not yet emerged. The test of samples from different regions across the country finds that the effect of digital infrastructure construction on expanding the urban-rural income gap is more significant in the western region and non-coastal areas, and there is no significant impact on the eastern region, central region and coastal areas. Finally, using the threshold model, it is found that the impact of digital infrastructure construction on urban-rural income gap has a nonlinear effect. When education reaches the threshold, digital infrastructure construction is conducive to narrowing the urban-rural income gap; while the rural financial development is lower than the first threshold, the digital infrastructure construction expands the urban-rural income gap. When the first threshold and the second threshold are reached, the digital infrastructure construction reduces the urban-rural income gap.