The economic and environmental dividends of the digital development strategy: Evidence from Chinese cities

Abstract

Digital development is critical for achieving coordinated regional economic growth, energy conservation, and emissions reduction, which makes it a viable method for achieving carbon neutrality and peaks. This study investigates the impact of the digital economy on urban total factor productivity and carbon emissions, as well as its mechanism, from 2011 to 2019 by developing a digital economy evaluation index system. We find that the growth of the digital economy can increase urban total factor productivity while lowering carbon emissions and also has a significant spatial spillover effect on regional economic growth, energy conservation, and emissions reduction. The main influencing mechanism is that the digital economy accelerates marketization by encouraging industrial structure upgrades and technological progress, which results in higher total factor productivity and lower energy consumption. In terms of the spatial distribution, the digital economy promotes total factor productivity more in the central and western regions and large cities and promotes carbon emission reduction less in the eastern regions and smaller cities. The findings extend the benefits of the digital economy beyond economic and social welfare benefits and serve as a model for achieving a win–win situation in terms of both economic growth and carbon emissions reduction.