The impact of digitalization on green economic efficiency: Empirical evidence from city-level panel data in China

Abstract

The digital transformation of global economic and social activities brought about by advanced information and communication technology (ICT) may have a profound impact on sustainable economic development. This research measures the digitalization of the economy and society in cities of China based on Internet-related indicators and digital financial development and investigates the economic and environmental effects of their digitalization. The empirical results show that digitalization has significantly improved green economic efficiency (GEE), and this finding remains valid after a series of robust analyses. However, there is regional heterogeneity in the improvement effect of GEE. The green effect of digitalization is significant only in the cities with a high degree of economic servitization, capital-abundant cities, and eastern cities. Although digitalization has promoted the green development of the urban economy, it also has a negative spatial spillover effect on the GEE of neighboring cities. One explanation is that cities are shifting polluting industries to other areas during the process of digital transformation.

Does digitalization make urban development greener? A case from 276 cities in China

“…Among them, digital infrastructure is the hardware condition for regional digitalization; digital application is the embodiment of digital connotation, reflecting the integration degree among digitalization and regional economy and society; digital industry development is an important support for digital development (Pang et al, 2021); digital financial inclusion is an essential component in digital life, reflecting that digital finance can meet the needs of those small, medium and micro enterprises and low-income people who usually have difficulty in enjoying financial services, embodying the proper meaning of inclusive finance (Guo et al, 2020). Based on the availability of data, for the specific indicators, the development level of digital infrastructure is measured by the density of long-distance optical cables, the capacity of mobile phone switches per capita, and the number of Internet broadband access ports per capita (Yang Z. et al, 2022;, which is the main carrier of information transmission and the basis for digitalization development at present; digital applications are measured from two aspects: production and life, through the number of websites owned by a company, the penetration rate of mobile phones (Lee et al, 2022), and the per capita express business volume; the development level of the digital industry is evaluated by the proportion of digital industry employment in urban unit employment, the proportion of digital industry fixed asset investment in the entire society's fixed asset investment, and the proportion of digital industry income in regional GDP. For digital financial inclusion, the Peking University Digital Financial Inclusion Index of China (PKU-DFIIC; Guo et al, 2020) is used, which is based on the digitalization degree, breadth of coverage and depth of usage etc.…”

“…Currently, it is mainly reflected in three aspects. First is the measurement of digitalization (Jovanovic et al, 2018), including the selection of indicators; second is the relationship between digitalization and some certain aspects of socioeconomic development (Habibi and Zabardast, 2020;Zhao et al, 2020;Fan and Wu, 2021;Liu et al, 2021;Lee et al, 2022;Hao et al, 2023), such as the relationship between digitalization and high-quality development at the provincial level in China (Fan and Wu, 2021); third, the relationship between digitalization and the environment (Ahmadova et al, 2022;Cui et al, 2022), such as whether digitalization can improve environmental quality (Pang et al, 2021). Greening development has become the theme of the times.…”

“…Therefore, not only the economic development should be green, but also the natural environment should reach a certain degree of greenness, and the social tolerance should be "greener" as well, for which the government should have better support. Accordingly, the current research on urban greening development is more reflected from the economic perspective by all green production factors (Cui et al, 2020), as well as green economic development (Loiseau et al, 2016;Hao et al, 2023) and green economic efficiency (Dong et al, 2021;Lee et al, 2022). Of course, there are also studies on urban greening development from resource and environmental perspectives (Fang et al, 2020;Abid et al, 2021).…”

Research on the coupling mechanism and influencing factors of digital economy and green technology innovation in Chinese urban agglomerations

“…Some scholars have categorized industries in the context of the digital economy, encompassing areas such as green finance 20 , digital finance 21 – 23 , Internet development 24 , smart cities 25 , and e-commerce 26 . These scholars have investigated the mechanism of segmenting industries on the innovation of green technology 27 , threshold effect 28 , spatial effect 29 , and other related topics. Some researchers utilise the Dubin model, coupling coordination degree model, and exploratory spatial analysis method to examine the impact of digital economic industry segmentation on green technology innovation.…”

A Literature Review on the Application of Digital Technology in Achieving Green Supply Chain Management

“…Indeed, the design cost of digital technology is relatively high, and the benefits brought by digital technology are still being considered by many enterprises [65][66][67]. However, the application of digital technologies in the green supply chain is still in its infancy, and most practices are still in their early stages [68,69]. Many scholars have carried out digital reform, but they needed help to put the concept of digital technology into the deep implementation of green supply chains [70,71].…”