Most previous articles estimate the effects of information communication technologies (ICTs) on economic growth average using national data without consideration of heterogeneity of ICT effects on cities across multiple economic development. The heterogeneity of ICT effects is confirmed to promote both the sustainability and equitableness of the whole cities. In order to investigate the heterogeneous effects of ICT between developed and less developed cities, a quantile spatial autoregressive (QSAR) model is applied to estimate coefficients at different quantiles while accounting for the spatial dependence of urban economy. We find significantly positive effects of ICT in local and neighboring cities after controlling the spatial dependence of urban economy. We have further found larger coefficients of ICT-related variables in cities with lower gross domestic product (GDP) per capital suggesting that digital dividend from ICT prefer the less developed cities over developed cities. Our conclusions indicate there would be “double dividend” from ICT, namely an improvement of both overall economic growth and balanced economic development among cities.

Internet business adoption is an essential determinant of regional innovation which has received little attention in the literature. This paper emphasizes the role and threshold effect of Internet business adoption in increasing regional innovation outputs. We construct a threshold spatial autoregressive model to illustrate the nonlinear positive impact of Internet business adoption on innovation, simultaneously estimating interregional knowledge spillovers. To test threshold effect and interregional knowledge spillover, we use province-level panel data set in China and calculate Moran’s I and LR-like statistics to confirm the nonlinearity and spatial dependence. Within the empirical model, we find a positive relationship between the number of websites owned by local firms and the number of patents filed in that specific region. Our analysis suggests that Internet business adoption has a greater marginal benefit on the innovation of isolate regions. The results also indicate that ignoring interregional knowledge spillover may cause mistakes in the model on regional innovation systems. Policy implications for these results suggest that the government should not only pay attention to Internet development of the whole country but also encourage the reduction of digital divisions among regions