Does Infrastructure Improve Residents’ Consumption? Evidence from China’s New-Generation Infrastructure

The new infrastructure is becoming the key support and important material guarantee for a new round of scientific and industrial changes in China. In recent years, the further upgrading of the scale and structure of resident consumption has faced resistance from both the supply and demand sides. By enhancing the consuming environment, enhancing transaction efficiency, and lowering spatial barriers, among other benefits, new infrastructure could encourage improvements in resident consumption level and the optimization of consumption structure. This research empirically investigates the consumption implications of new infrastructure under two standards using panel data from 30 Chinese provinces from 2003 to 2020. The findings demonstrate that new infrastructure significantly affects the expansion and upgrading of consumption. Its influence is quite heterogeneous. Additionally, it is discovered during the mechanism of influence test that improving the industrial structure might have a considerable impact on the consumption effect of new infrastructure. In the context of China’s economic transition to high quality, this paper aims to quicken the upgrading of industrial structure and optimize the layout of new infrastructure investment in order to increase consumer returns from infrastructure and support consumption upgrading.