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Regional Science & Technology and Innovation

Digital Ecology, Financial Development, and Regional Innovation  Level 

Li Feng, Zhang Lili

(School of Business, Jishou University, Jishou 416000, China )

Abstract: In the context of global digitization, digital ecology has merged as pivotal forces in  national innovation development and key engine for constructing competitive advantages. A good  digital ecology has become an inherent requirement for the construction of digital China. As digitization progresses, the digital ecology has stimulated the vitality of regional innovation in China  and had a fundamental impact on regional innovation development. The level of regional innovation not only determines the level of regional development, but also underpins the national innovation enhancement. As a matter of fact, a good digital ecology will change the composition of innovation elements, organization and resources allocation of innovation by promoting the deep integration of digital technology and innovation, resulting in the reconfiguration of the regional innovation framework and ultimately causing changes in the regional innovation level. However, existing academic research lacks an integrated framework that combines digital ecology with regional innovation. Therefore, exploring the impact of digital ecology on regional innovation level  and the mechanism it works on is a crucial issue to be studied. Taking the provincial panel data from 2013 to 2020 as the research sample, this study measures the level of digital ecology adopting the entropy method. And the stata17 is used to conduct  empirical regression to analyse the impact of digital ecology on regional innovation level, so as to  test the financial development mechanism between digital ecology and regional innovation level. Firstly, based on the connotation and characteristics of digital ecology, the impact of digital ecology on the regional innovation level is analyzed, and panel regression analysis is carried out using individual fixed effect model. Secondly, according to the characteristics of innovation activities, the mediating effect model is used to analyse the mechanism of financial development between digital ecology and regional innovation level. Meanwhile, the mediation test of the bootstrap method is used to further determine the magnitude of the mediation effect of financial development. The empirical results show that digital ecology significantly promotes regional innovation  level, and this result is still present after a series of robustness tests. Panel quantile regression reveals that the impact of digital ecology on regional innovation level gradually decreases as quantiles increase. Heterogeneity analysis shows a significant promotive effect of digital ecology on regional innovation level in eastern areas, whereas this effect is not evident in central and western  regions. Further research found that financial development plays a significant mediating role between digital ecology and regional innovation level. In other words, digital ecology can drive regional innovation improvements by enhancing financial development levels. The mediating role  is further verified by the robustness test. Based on the above analysis, to begin with, this paper suggests implementing differentiated  digital ecology strategies. Next, it comprehensively promotes the infrastructure construction of  digital ecology to create a good digital ecology. Lastly, give full play to the facilitating role of digital ecology in enhancing the level of regional innovation, and increase the integration and development of digital ecology with the financial market, as well as other measures, to promote the enhancement of the level of regional innovation. 

Key words: digital ecology; financial development; regional innovation level; mediation effect