Digital economy and its spatial effect on green productivity gains in manufacturing: Evidence from China

Abstract

The digital economy is driving a new round of technological innovation and industrial transformation. This study estimates the level of China's digital economy by adopting the entropy approach and calculates the growth of green total factor productivity (GTFP) in China's manufacturing industry by applying the Luenberger-Hicks-Moorsteen (LHM) indicator and considering by-production (BP) technology. The results show that China's digital economy and GTFP of manufacturing have been growing steadily. Manufacturing industry GTFP growth has been significantly enhanced by the digital economy, and digital economy levels in the surrounding areas have significant spatial spillover effects on green productivity growth. Moreover, the green growth of manufacturing industry in the western region is faster than that in the central and eastern regions. The digital economy's spillover effects on the manufacturing industry are more evident in the western region. The findings of this study offer empirical evidence on the role the digital economy plays in fostering sustainable growth in China's manufacturing sector.