The Impact of China’s Digital Economy Development Level on China-Korea Import and Export Trade

Purpose - The purpose of this study is to analyze the impact of China’s digital economy development on China South Korea’s import and export trade, explore the mechanism of digital economy on China South Korea’s trade and how to better promote the development of bilateral trade. Design/methodology - This study selected panel data from 30 provinces in China from 2014 to 2020 to build a two-way fixed effect model. Taking the total imports and exports of China and South Korea, China’s total exports to South Korea and China’s total imports from South Korea as explanatory variables, this study constructed indicators from the four aspects of digital economic infrastructure, industrial digitization, digital industrialization and digital finance combined with the availability of relevant data at the provincial level, GDP and trade dependence are introduced as control variables. Findings - The results show that the level of industrial digitization and digital industrialization is the main factor affecting China South Korea trade, and actively promoting the integration of digital economy and industrialization is conducive to further strengthening China South Korea trade. The digital economic infrastructure inhibits the import and export of China and South Korea and their total exports, but promotes their total imports. The inhibition of digital finance on China South Korea trade is mainly reflected in the inhibition of China’s total exports to South Korea. This paper believes that the main reason is that the participation of small and medium-sized enterprises in China South Korea trade is low, and the information matching between the production end and the consumer end of trade is low, which inhibits the promotion effect of digital finance on international trade. According to the research results, analyzing the impact of China’s digital economy on China South Korea trade in all aspects is conducive to strengthening China South Korea trade exchanges and injecting new vitality into China South Korea import and export trade in the new era. Originality/value -This study is the first attempt to introduce the development level of digital economy into the effect model of China South Korea’s import and export impact, and explore its impact on China South Korea’s trade from the perspective of China’s digital economy development level for the first time. Under the background of new trends and changes in China South Korea trade, it provides new perspectives and solutions for promoting the development of China South Korea import and export trade.