Exploring the Role of Digital Economy in Enhanced Green Productivity in China’s Manufacturing Sector: Fresh Evidence for Achieving Sustainable Development Goals

Abstract

Confronted with challenges such as escalating demand, expanding energy consumption, and emissions, China’s manufacturing sector stands at a pivotal juncture on its path towards sustainable development. Against the backdrop of a new wave of technological revolution and industrial transformation, exploring how the digital economy can foster growth in green total factor productivity (GTFP), particularly amidst technological diversification, holds significant importance for realizing sustainable development objectives. This study employs the system generalized method of moments (System GMM), encompassing 30 provinces in China, to delve deeply into the notable and dynamic correlation between the development index of the digital economy and GTFP. The findings reveal that the advancement of the digital economy significantly influences GTFP, underscoring its direct and enduring impact on green productivity. Key mechanisms through which the digital economy promotes green productivity are identified, including resource optimization, green technological innovation, data-driven decision making, and the transformation of environmentally sustainable behaviors. By bridging gaps in existing literature, this study integrates economic and environmental perspectives, emphasizing the necessity for formulating digital innovation policies aligned with environmental objectives. It provides richer insights into the role of the digital economy in enhancing GTFP, accentuating the potential of digital technologies in driving green transformation. With its holistic approach, this study combines economic efficiency with environmental sustainability, offering crucial guidance for policymakers and industry stakeholders in crafting sustainable development strategies.