Quantitative Analysis of the Internet Economy

Graduate School of Arts and Sciences, Boston University Brookline Massachusettes 02215 USA

Corresponding author: yuzhuo@bu.edu

Abstract

Since the beginning of the 21st century, China has made great strides in the development of the Internet, which has had an extensive and far-reaching impact on the economy and society. This has led to a growing number of scholars’ attention paid to issues related to the Internet and economic development. The Internet provides a superior information platform for all economic entities, enabling economic exchanges to transcend the constraints of time and space. And on the basis of expanding the scope of transactions, reducing transaction costs, it deepens the social division of labor, creating more job vacancies, which is one of the crucial driving forces of economic development in the new era, whose role has been irreplaceable: On the one hand, as an important symbol of the knowledge economy era and the main carrier of information life, the Internet serves as the bearer of the development of a new industry - the Internet industry, making it grow and expand at an alarming rate and transform into a new force in China’s industry, injecting vitality into economic growth; besides, the Internet, by virtue of its information platform and technological advantages, has brought opportunities and changes to traditional industries in many aspects. As can be seen, it is no longer possible to study economic growth without paying attention to the role of Internet factors. Therefore, this paper builds an economic growth model, selects appropriate variables and data, studies the magnitude of Internet development’s contribution to the economy, and discusses the characteristics of the Internet’s economic promotion effect under the analysis of the current situation, characteristics and trends of China’s Internet development.