An Empirical Study on the Indirect Empowerment of Economic Development by the Digital Economy-Based on the Perspective of China’s Domestic Economic Cycle

In the post-epidemic era, China’s digital economy is booming. Especially in the new “dual circulation” development pattern, it has gradually become a new driving force and major pillar for promoting high-quality economic development. This paper mainly researches the indirect ways in which the digital economy empowers economic development from the perspective of China’s domestic economic cycle. On this basis, it builds a framework for the mechanism of action. Through the test of the multiple mediation model, it is found that the contribution of the parallel mediation effect of production factors marketization and digital financial inclusion is more than 50%, while the effect of consumption structure upgrades is only about 4%. It is worth noting that the chain mediation effect of production factors marketization and digital financial inclusion acting through industrial structure upgrades on economic development is highly significant at the 1% level. Meanwhile, these three factors interact with each other two by two and constitute a chain-mediated path which is all significant at the 5% level. Therefore, in the context of the digital economy, accelerating the development of new industries to optimize the industrial structure, smoothing the flow of production factors, and improving the digital financial system to tap the consumer market will become the focus of promoting high-quality economic development in China in the future.