The environmental externality of China’s digital infrastructure: does institution supply matter?

Abstract

ABSTRACT Whether the digital infrastructure can resolve the conflict between environmental concerns and economic development is an urgent issue to be addressed in China. By taking the implementation of ‘Broadband China’ policy as a quasi-natural experiment and using 15 million policy statements to measure the environmental protection institution (EPI), this study investigates the environmental externality of urban digital infrastructure and the nonlinear supporting role of EPI. It is found that urban digital infrastructure is conducive to reducing regional energy intensity and carbon emission intensity. After a series of robustness tests, the conclusions are still credible. Mechanism analysis shows that promoting the structural upgrading of the service industry, accelerating the intensive development of the manufacturing industry and improving the quality of regional innovation are three impact channels. Furthermore, the EPI plays a nonlinear supporting role in the process of digital infrastructure’s promoting regional energy saving and emission reduction. This study incorporates the supply of environmental protection institution into the analytical framework, thus providing a new perspective for comprehending the externality of digital infrastructure and environmental protection institution.