Has digital policy improved the high-quality development of the economy?

The national digital economy innovation and development pilot zone represents a pivotal digital policy that significantly accelerates digital economic growth. This study analyzed its impact on high-quality economic development using urban-level panel data from China and a difference-in-differences (DID) approach. Our results revealed that the pilot zone significantly promotes high-quality economic development, which remained robust following placebo tests and propensity score matching. Our analysis revealed significant heterogeneity in the pilot zone’s impact, which is influenced by urban attributes and factors. Non-linear regression analysis indicated that the pilot zone yielded a more pronounced positive effect in cities with higher initial levels of high-quality economic development, while spatial tests revealed an adverse spatial spillover effect on surrounding areas. The study identified green technological innovation, industrial agglomeration, and reduced capital misallocation as key mechanisms through which the pilot zone contributed to high-quality economic development. Despite an objective trend of regional convergence, the pilot zone did not positively contribute to this process. Taken together, the findings of this study provide important theoretical support for the implementation of digital policies and the formulation of strategies to foster high-quality economic development.