Impact Of The Internet On The Regional Economy And Its Convergence

The world now is undergoing a revolutionary change. Human society marched from industrial age to information age through the rapid popularization and application of Internet. The spatial-temporal evolution of Internet will surely contribute to the new-pattern of social and economic development. By reason of the close relationship of Internet and regional economy, How and how much can the Internet affect the regional economic differences became the focus of debate among scholars.This paper summarized the previous studies first, and applied spatial analysis methods and the econometric models with31provinces of China as the research object, in order to analyze the Internet development in China, including the spatial-temporal evolution character of Internet, and the relationship between Internet and regional economic differences. The results could provide a reference for the coordinated development.To begin with, the article analyzed the evolution of the spatial and temporal differences of the Internet in China. We selected Internet users per10000persons as the indicator to measure the Internet development level and collected31provincial data from2000to2011. The results showed that there existed significant disparate Internet development in China, however, which was gradually narrowing. In addition, a spatial agglomeration phenomenon was found. Combined with Theil index and its secondary decomposition, we analyzed the differences among the East, the Central and the West of China, and found that inner-area disparity was the main part of all attribution factors to the overall disparity in the past decade; while inter-area disparity played a more important role in recent years and showed an increasingly prominent trend. Three major inner-area disparities showed the following characteristics. First, the national disparity was mainly caused by the inner-area disparity in the East of China which was much series than the other two areas. Second, the disparity in the Central of China was less obvious and influential due to its fluctuant Internet permeation. Third, the disparity in the west of China was increasing and gradually became the main factors affecting the national disparity.An exploratory spatial data analysis was used to study the diffusion type of the Internet, and we found that its spatial autocorrelation became more and more significant at past. According to the spatial autocorrelation,31provinces could be divided into four parts, such as diffusion effects area, transition development area, polarization effects area and low-speed development area. For most provinces, Internet development maintained a stable path dependence.In this paper, with inter-provincial panel data during2000-2011, an endogenous growth model was established to verify whether and how the Internet played its role in the regional economy. Spatial weight matrix was drew into the endogenous growth model to explore the spillover of Internet. The results indicated that Internet would promote regional economy, but not at high potency. We tested three regions respectively and reached a conclusion that the potency of Internet was varied, and followed by central, eastern and western. Meanwhile, the disparities were expanded by the gap of science and technology environment. In addition, we maintained there was a positive spillover of Internet, mainly overflowed through adjacent region, similar economy and similar urbanization. We established absolute convergence model and conditional convergence model, in order to verify whether the Internet expanded or narrowed the regional economic disparity. The results showed that during2000-2011weak regional economic convergence was eliminated by the Internet. From2000to2007, when the Internet was not widely available, the effect of Internet on regional economic convergence was not significant. After2007, the Internet promoted developed areas far more than backward areas, and the original economic convergence was eliminated with a balance effect showed. Overall, Internet virtually expanded regional economic disparities. The economy of central, eastern of China gave certain club convergence characteristic. Drawing Internet variable into the models respectively, we found the convergence was absent in the eastern, while deepened in the central. In fact, low-level club convergence was not conducive to reduce disparities. For the economy of the western, no obvious convergence or diffusion was found.