The Impact Of Digital Economy On Chinese Domestic Market Segmentation

The increasing uncertainty and complexity of the international environment and the farreaching impact of the COVID-19 bring necessity in establishing a "dual circulation" development pattern which domestic economic cycle plays a leading role.The further establishment of a unified big market,i.e.,the remission of domestic market segmentation is not only an important guarantee for the construction of a "dual circulation" pattern,but also essential for improving and perfecting the socialist market economy.When breaking domestic market segmentation,the advent of the digital age and China’s first-mover advantage in it has made it a major opportunity for the development of regions and traditional industries.Its destructive energy is also to break the natural,technical and institutional market segmentation,which makes it possible to establish a unified,open,competitive and orderly national market.Through analyzing the literature related to digital economy and market segmentation,and expounding the fundamental venation about the theory of circulation,institutional changes and specialization,this thesis believes that the influence of digital economy on Chinese market segmentation is worthy of study and is a topic that few people are currently involved in.Basing on the theoretical analysis,this thesis proposes the mechanism by which digital economy affects domestic market segmentation,that is,improving circulation efficiency,optimizing the business environment,and deepening the specialization.Then the thesis further uses the provincial data from 2004 to 2019 to construct a digital index with 19 indicators from four aspects: digital infrastructure,digital industrialization,industrial digitalization,and digital environment,and calculate the domestic market segmentation index with the price indexes of 11 types of goods and services.After the evaluation of the two indexes,the thesis,moreover,empirically analyzes the impact of digital economy on Chinese domestic market segmentation.To test the effect,the thesis first does the baseline regression,replaces the model and the dependent variable to do the robustness test,uses the instrumental variable to deal with the endogenous problem and separates the samples to do the heterogeneity test.To test the mechanism,the thesis uses the Bootstrap method.The results show that digital economy can significantly decrease the level of domestic market segmentation.This conclusion is still valid after replacing the model,replacing the dependent variable,and dealing with endogenous issue.The effect of digital economy on the extent of domestic market segmentation is mediated by circulation efficiency,specialization and business environment.From the perspective of sub-criteria of digital economy index,digital infrastructure and industrial digitization have a greater impact on the domestic market segmentation.From the perspective of different digitalization level,digital construction in areas with medium digital economy indexes has a greater impact in abating domestic market segmentation.From the perspective of different regions,the digital economy in the central region has a greater role in decreasing domestic market segmentation.More specifically,the improvement of the digital infrastructure in the central,western,northeastern,and mediumdigital provinces can reduce the extent of market segmentation,the improvement of the industrial digitalization level of the eastern,high-digital and medium-digital provinces can break the market segmentation.The formation of the digital environment in the eastern and central regions can bring down the level of domestic market segmentation.This thesis systematically analyzes the influence of digital economy on the reduction of domestic market segmentation and its mechanism.It expands the outer edge of circulation theory,institutional change theory and specialization theory in the context of digital economy.At the same time,this thesis specifically analyzes the differential impact of different digital economy dimension indexes on market segmentation in different regions and provinces with different degrees of digital economy,and provides more targeted suggestions for improving the level of digital economy to bring down the level of domestic market segmentation.