How Does Digital Industry Agglomeration Drive High-Quality Urban Development? An Analysis from Both Geographic and Virtual Perspectives

Abstract

In the digital economy era, the spatial organization of digital industry is evolving from geographic agglomeration to virtual-real integration, becoming a key driver of high-quality urban development. Using panel data from 30 provincial capital cities in China from 2013 to 2023, this paper examines the impact of digital industrial agglomeration on high-quality urban development from the dual perspectives of geographic agglomeration and virtual agglomeration. The results show that: (1) Both digital industry geographic agglomeration and virtual agglomeration significantly promote high-quality urban development, and geographic agglomeration presents an inverted-U relationship, first promoting and then inhibiting. (2) The impact of the two types of agglomeration has significant regional heterogeneity and agglomeration-level heterogeneity. Both types of agglomeration have their strongest promoting effect in the eastern region. Cities with low agglomeration levels mainly rely on scale expansion and digital capacity to accumulate and release potential. In contrast, cities with high agglomeration levels rely more on deepening innovation and optimizing spatial structure. (3) Both types of agglomeration have significant positive spatial spillover effects, which can promote the high-quality development of surrounding cities; however, when geographic agglomeration crosses the threshold, its spillover will be weakened. The conclusions of this paper provide policy implications for optimizing the spatial layout of the digital industry and promoting regional coordinated development.