Impact of new government-business relations on urban digital economy: Empirical evidence from China

Drawing from dynamic capability theory, we investigate how new government-business relations impact urban digital economy with mediating and moderating effect model, using panel data from 242 prefecture-level Chinese cities over 2017-2019. We find that building new governmentbusiness relations promote urban digital economy, with urban service capability playing a mediating role. We also find that digital infrastructure strengthens the impact of urban service capacity on urban digital economy. These findings are robust and more significant in eastern and larger cities. Our study provides new evidence on exploring mechanism and conditions by which new government-business relations influence urban digital economy.