The Impact of Digital-real Integration on Sustainable Development: Evidence from 288 Chinese Cities

Abstract The deep integration of the digital and real economies, termed "digital-real integration" herein, constitutes a critical pathway for advancing sustainable development. This study utilizes a sample of 288 Chinese cities to measure the development levels of both sectors using the entropy method. Through the application of a two-way fixed effects model, a moderation model, and a spatial Durbin model (SDM), the mechanisms through which digital-real integration influences sustainable development are systematically examined. The empirical results demonstrate that: (1) digital-real integration acts as a significant driver of sustainable development; (2) technological innovation and human capital function as positive moderators, amplifying this effect; (3) significant positive spatial spillover effects are observed, whereby digital-real integration enhances sustainable development in neighboring regions; and (4) the effects exhibit heterogeneity contingent upon urban location, resource endowment, and digital infrastructure levels. These findings provide a theoretical foundation and actionable policy implications for leveraging digital-real integration to achieve sustainable development goals.