Frontiers in Business, Economics and Management 
ISSN: 2766-824X | Vol. 8, No. 3, 2023 

 

76 

The	Impact	of	Digital	Economy	on	Circulation	
Efficiency:	Empirical	Evidence	from	China's	Postal	
Industry	
Yirong Jin 

School of International Economics and Trade, Anhui University of Finance and Economics, Bengbu 233030, Anhui, China 

 

Abstract: With the rapid development of digital technology, the traditional economic operation mode has been completely 
changed. Digital economy has become a new driving force for world economic growth. In the context of the new development 
model, accelerating the development of digital economy, deepening circulation reform and improving circulation efficiency have 
important theoretical and practical significance for stabilizing the national economic cycle. In order to explore the influence of 
the development of digital economy on the efficiency of circulation industry, this paper firstly expounds the basis of dividing the 
circulation industry from the theoretical level based on Marx's circular economy theory, and puts forward the mechanism of the 
influence of digital economy on the circulation efficiency. The DEA-Malmquist model is used to calculate the productivity of 
the total factors of the postal industry to represent the circulation efficiency. The regression results show that the development of 
digital economy has significantly improved the circulation efficiency of China's postal industry. 

Keywords: Digital Economy, Circulation Efficiency, China's Postal Industry. 
 

1. Introduction 
In the "Proposal of the CPC Central Committee on 

Formulating the 14th Five-Year Plan for National Economic 
and Social Development and the Long-range Goals for 2035" 
issued in March 2021, it is proposed that the digital economy 
needs to develop vigorously, promote digital industrialization 
and industrial digitization, and further promote the integration 
of the digital economy with the real economy and traditional 
industries, so as to give birth to new industries, new business 
forms and new models. In addition, the document once again 
regards circulation as the hub role of production and sales, 
and its key role in the domestic big cycle has been highlighted. 

To construct a new development pattern, we must take the 
construction of modern circulation system as an important 
strategic task to grasp. Both domestic and international 
circulation cannot be separated from an efficient modern 
circulation system. In the process of social reproduction, 
circulation efficiency and production efficiency are equally 
important. Facing the strategic deployment of accelerating the 
improvement of the high-level socialist market economic 
system in the new era, there are still a number of questions in 
the field of circulation in China that need to be answered, and 
more important, theoretical research should be advanced. 

During the period of the 14th Five-Year Plan, we should 
firmly seize the opportunity to develop the digital economy 
and push forward the deep integration of the digital economy 
and the real economy. Through data flow, sharing and 
cooperation, we will overcome bottlenecks in the upstream 
and downstream supply chains, overcome shortcomings and 
raise the overall productivity of factors of production. 
Encourage potential user demand from user data, provide 
high-quality, user-centered and market-oriented services, and 
form a high level of demand dynamic balance by providing 
and creating demand. Among them, the circulation industry, 
as the key axis of upstream production and downstream 
consumption, needs to make good use of digital information 
technology to promote industrial development, accelerate the 

improvement of circulation efficiency, and promote the 
circulation industry to improve quality and efficiency. 

The sustainable development of the digital economy has 
further accelerated the application and penetration of modern 
information technologies such as mobile Internet, big data 
and 5G technology in various branch industries of circulation, 
expanded the scope and space of modern economic activities, 
and provided new technologies, new business forms and new 
models for commercial circulation and intelligent logistics 
systems. The digitalization of the retail industry is not the 
subversion of the nature of the industry, but the use of digital 
technology to solve the contradiction of supply and demand 
mismatch [1]. In the context of digital economy, the adoption 
of multiple strategies by circulation enterprises may promote 
the improvement of circulation efficiency [2]. The application 
of digital technology in circulation enterprises has greatly 
weakened the information asymmetry, which is conducive to 
reducing the mismatch of resources and the cost of 
commodity and factor circulation [3]. 

In the era of digital economy, circulation efficiency is 
expected to be further broken through, and become a 
significant opportunity to break through the plugging point of 
national economic circulation and promote the new 
development pattern of double circulation. The current 
research on the digital economy to promote the circulation 
efficiency of the mechanism is not clear. Most of the research 
is only theoretical elaboration, but lack of empirical data test. 
This paper first establishes the theoretical framework 
according to Marx's circulation economy theory, then uses the 
data of China's postal industry to empirically test the 
mechanism of digital economy affecting circulation 
efficiency, and finally puts forward corresponding policy 
suggestions according to the empirical test results. 

2. Analysis of Theory and Mechanism 
Marx's theory of circulation economy discusses the change 

of commodity form and value increment in the process of 
commodity circulation. The social reproduction process can 



 

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be understood as the circulation movement process at the 
whole social level, while the simple Commodity Exchange in 
the early stage of human society can be understood as the 
circulation process at the micro level, that is, the circulation 
to meet the basic needs of people's material life. Marx 
elaborated the views on the labor nature of commodity 
circulation, mainly focusing on the specific analysis of 
circulation costs, commercial capital, commercial interests 
and other issues. The cost of circulation can be divided into 
three aspects: pure circulation cost, storage cost and 
transportation cost. The pure transportation cost is generated 
in the daily transaction of commodities, which is the 
deduction of capital other than the cost of physical and 
chemical labor. The transportation cost and storage cost 
together can be called "productive circulation cost" [4]. The 
logistics industry undertakes the main productive labor in the 
field of circulation, so the efficiency improvement of the 
logistics industry is an important node to promote the high-
quality development of China's economy [5]. The 
infrastructure construction of the express service industry is 
an important symbol of the basic ability of the circulation 
industry to promote the development of the national economy. 
Based on the background of digital economy, the efficiency 
reform of the circulation industry is promoted by digital 
technology in this paper. The reason for the analysis of China 
Post Express is that postal express is an important 
representative of China's economic transformation and 
upgrading, and the industry has complete industrial data at the 
national level. 

The development of digital economy has combined the 
distribution industry with the "Internet +" mode, effectively 
improving the management level of the distribution industry, 
sales and distribution capacity, distribution capacity, and 
promoting the quality of the modern distribution industry. 
Through the transformation of industry digitization, digital 
economy has improved the digitalization and 
intellectualization of traditional circulation production 
capacity, saved production costs and improved production 
efficiency. Therefore, this paper proposes the following 
hypothesis: 

Hypothesis 1: The development of digital economy can 
significantly promote the improvement of circulation industry 
efficiency. 

3. Data Description and Variable 
Measurement 

3.1. Data description 
Since the pilot policy of "Broadband China" strategy was 

formally proposed in August 2013, this paper selects data 
from 2014 to 2020 at the provincial level for research and 
analysis. In this paper, statistical data on postal express 
delivery are from the State Post Bureau of the People's 
Republic of China, and other data at the provincial and 
municipal level are from China Statistical Yearbook. 

3.2. Measurement of variables 
The selected interpreted variable is the circulation 

efficiency (eff). This paper refers to the efficiency 
measurement method used in existing literatures [6], and uses 

DEA-Malmquist model to measure the circulation efficiency. 
Since this efficiency measurement method does not need to 
set production function in advance, it can avoid the problems 
caused by the wrong setting of function form. In the selection 
of input-output index, capital and labor are the basic input 
factors of enterprise operation. Meanwhile, it is considered 
that the cost generated in the process of enterprise operation 
will affect efficiency. In this paper, the number of postal 
industry employees, net fixed assets and postal express 
business related costs as input indicators. Considering that the 
income from the main business can comprehensively reflect 
the operating ability of the enterprise, the income from the 
express business of China Post is taken as the output index. 

The explanatory variable is the level of Digital Economy 
Development (digl). This paper constructs the digital 
economy development index by referring to the measurement 
method [7] of the development level of digital economy in the 
existing literature. The optical cable line length and the 
number of Internet broadband access ports are two indicators 
to measure the infrastructure of digital economy. The 
penetration rate of mobile phone is used to measure the 
development of digital economy at the level of individual 
application, and the number of computers per 100 people at 
the level of enterprise application is used to measure the 
number of computers per 100 people. In this paper, the digital 
economy index constructed above is processed 
logarithmically, making it as the proxy variable of the 
development level of digital economy. 

This paper mainly controls the influence of time and region 
on model measurement. Since the operation and development 
of the circulation industry cannot be closely separated from 
the production sector and the total amount of commodities in 
circulation, this paper chooses per capita gross product (rgdp) 
to represent the level of regional economic development and 
takes it as the control variable at the regional level. 

4. Empirical Analysis 

4.1. Benchmark regression model 
In order to explore the impact of the development of digital 

economy on the efficiency of circulation industry, the 
benchmark regression model is constructed according to the 
above theoretical analysis as follows: 

 

𝑒𝑓𝑓 , 𝛽 𝛽 𝑑𝑖𝑔𝑙 , 𝛽 𝑥 , 𝜀 ,                  (1) 

 

Where, eff is the circulation efficiency, digl is the 
development level of digital economy, x is the control 
variable at the provincial level, i represents the province, t 
represents the year, and ε is the random disturbance term. 

4.2. Empirical analysis results 
4.2.1. Panel unit root test 

In order to reduce the pseudo-regression phenomenon that 
may occur in panel data, four methods such as LLC, IPS, 
ADF-Fisher and PP-FFisher are used in this paper to conduct 
unit root test on panel data, and the analysis results are shown 
in Table 1. As can be seen from Table 1, the panel data 
basically meets the panel unit root test and has good stability. 

 
 

 



 

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Table 1. Panel unit root test 

Variables IPS LLC ADF-Fisher PP-Fisher 

eff 0.28073 * * * 6.2756 * * * 4.7060 * * * 5.1042 * * * 

digl 1.8752 * * * 3.3797 * * * 4.0104 * * * 2.21917 * * * 

rgdp 1.8975 * * * 2.7646 * * * 7.6949 * * * 8.2379 * * * 

Note: Calculated according to eviews software, where *, ** and *** are significant at the level of 0.1, 0.05 and 0.01 respectively. 

 

4.2.2. Analysis of benchmark regression results 
In order to explore the impact of the development level of 

digital economy on the circulation efficiency of the postal 
industry, after establishing the benchmark regression model, 
this paper adopts Hausmann test to determine the best choice 
of model estimation method. Table 2 reports the empirical 
results of the influence of the development level of digital 
economy on circulation efficiency after the addition of control 
variables. According to the test results, the Hausman test 
rejects the original hypothesis at the significance level of 1%. 
Therefore, the fixed-plate effect model is selected for analysis 
in this paper. The specific regression results are shown in 
Table 2. 

 
Table 2. Baseline regression results 

Variables (1)eff_RE (2)eff_FE 
digl 0.0751 * * * 

(1.85) 
0.085 * * * 

(2.81) 
rgdp 0.0954 * * * 

(2.38) 
0.0238 * * * 

(3.58) 
_cons 1.9054 * * * 

(1.49) 
1.4602 * * * 

(1.68) 
R2 0.1642 0.1472 
N 217 217 

Hausman chi2 16.9351 * * * 17.8645 * * * 
p-value (0.0000) (0.0000) 

Note: *, ** and *** represent significant correlation at the levels of 
0.1, 0.05 and 0.01, respectively, and the Robust is in brackets. 

 

As can be seen from the results of Table 2, after adding 
control variables and fixed effects, the influence coefficient 
of the development level of digital economy on circulation 
efficiency is 1.4602, and the coefficient is significant at the 1% 
level, indicating that the continuous development of digital 
economy will promote the circulation efficiency of China's 
postal industry. In other words, the hypothesis proposed 
above is proved. From the economic perspective, every 1% 
increase in the development level of digital economy will 
increase the circulation efficiency by 1.4602. From the results 
of control variables, the coefficient of per capita gdp is 
significant at the 1% level, indicating that economic 
development is an important guarantee to promote the 
improvement of circulation efficiency, which is conducive to 
promoting the improvement of circulation efficiency. 

4.2.3. Heterogeneity analysis 
This paper divides the data of China's 31 provinces and 

municipalities into three groups, namely east, central and west, 
for heterogeneity analysis, in order to explore the impact of 
the development of digital economy on circulation efficiency 
from the perspective of different regional development. 

The results of regression analysis are shown in Table 3. The 
development level of digital economy plays a significant role 
in promoting the eastern, central and western regions, among 
which, the development level of digital economy plays a more 

significant role in promoting the eastern and western regions. 
This paper believes that the eastern region mainly 
concentrates the high-end scientific and technological 
manufacturing industry, which promotes the scientific and 
technological progress of the region. The rise and 
development of digital economy may be more based on 
technological innovation to improve the circulation efficiency 
of the postal industry in this region. The significant promotion 
of digital economy to the western region may be due to the 
relatively backward economic development in the western 
region. Therefore, once digital technology is applied, it will 
play a more obvious role in promoting the development of 
this region. 

For control variables, per capita national income has 
positive and negative impacts on circulation efficiency. The 
impact on the eastern part of the country is negative, possibly 
because the living standard of residents in the eastern part of 
the country has been at a higher level, so the economic 
development has weakened the promotion of circulation 
efficiency. However, the per capita income level in the west 
is lower than that in the east and central part of the country, 
so the economic development has a weak effect on the 
circulation efficiency, and the improvement of circulation 
efficiency may mainly come from the construction of digital 
infrastructure. For the central region, the development level 
of digital economy is in the middle and upper reaches, and the 
development of digital economy has significantly promoted 
the circulation efficiency of the postal industry in this region. 
In addition, per capita national income also has a significant 
promoting effect on circulation efficiency. 

 
Table 3. Heterogeneity analysis 

Variables 
Eastern 
region 

Central 
region 

Western 
region 

digl 
0.0811 * * * 

(0.146) 
0.0389 * 
(0.498) 

0.0601 * * 
(0.387) 

rgdp 
0.0239 * * * 

(0.816) 
0.0210 * * * 

(0.042) 
0.0621 * 
(0.039) 

_cons 
1.4907 * * * 

(0.079) 
1.4967 * * * 

(0.199) 
1.5494*** 

(0.167) 
R2 0.197 0.184 0.146 
N 96 72 80 

Note: *, ** and *** indicate significant correlation at 0.1, 0.05 and 
0.01, respectively, and Robust is in parentheses. 

5. Conclusion 
Based on the above analysis, this paper draws the following 

conclusions: The development of digital economy has 
significantly improved the circulation efficiency of the postal 
industry. With the improvement of social and economic 
development level, it will promote the development of 
circulation industry and improve circulation efficiency. From 
the perspective of different regions, the digital economy has 
a significant promoting effect on the circulation efficiency of 
postal industry. The development level of regional economy 



 

79 

has a weak effect on circulation efficiency, or even a negative 
weakening. Due to its technological advantages over the other 
two regions, the digital technology innovation in the eastern 
region is more rapid and the development level of digital 
economy is also higher than the other two regions. The digital 
economy construction in the central region is at an upper 
medium level, and both the development level of digital 
economy and per capita national income in the region show a 
significant positive promoting effect. Due to the weak 
economic foundation, the depth and breadth of the 
popularization of digital technology in the western region are 
weaker than the other two regions, but the development of 
digital economy has significantly improved the circulation 
level of the postal industry in this region. In addition, the 
impact of per capita national income on circulation efficiency 
is weak. 

Therefore, the policy suggestions put forward in this paper 
are as follows: First, the government should continue to 
improve the construction of national digital economy 
infrastructure and give play to the network effect of 
information infrastructure. Then, it is necessary to pay 
attention to regional differences, adapt to local conditions, 
promote balanced development at the regional level, increase 
investment in information infrastructure construction in the 
west, speed up industrial digitization and digital 
industrialization in the west, and realize the coordinated 
development of the east, central and west regions. Finally, the 
circulation industry needs to accelerate the transformation of 
informatization and digitalization, and the traditional low 
efficiency links should be reformed in combination with the 
digital economy.  

Acknowledgment 
This work was supported by the Graduate Research and 

Innovation Fund of Anhui University of Finance and 
Economics, "The Influence Mechanism of Digital Economy 
on Circulation Efficiency" (ACYC2021163). 

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