IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v145y2025ics0140988325002361.html
   My bibliography  Save this article

Analyzing the impact of supply chain and digitalization in the Chinese economy: What is the role of energy consumption, government expenditure, and industrialization in environmental pollution?

Author

Listed:
  • Xiu, Guangli

Abstract

The handling and transportation of products also contribute to the emission of air pollution, even though the use of technology assists in keeping it to a minimum level. To further delve into this aspect, this study aims to examine how energy consumption, supply chain, digitalization, government final consumption expenditure, industrialization, and economic development impact air pollution emissions in China's economy. For this purpose, the study employed Kernel Regularized Least Squares (KRLS) and quantile-on-quantile regression from 1995 to 2023. The KRLS findings depict that energy consumption, supply chain, and digitalization negatively impact air pollution emissions, emphasizing the need for sustainable practices in the Chinese economy. However, government expenditure, industrialization, and economic development have a positive influence, intensifying their impacts on air pollution at higher levels. Similar results observed in quantile-on-quantile regression, energy consumption, and government expenditure tend to have the adverse effects observed when a higher level of air pollution coincides. Digitalization has been observed to mitigate some of the harmful effects of air pollution, highlighting a helpful interaction under certain conditions. Industrialization in construction has a positive relationship with air pollution, indicating that increased industrial activity may raise higher air pollution levels. The overall impact of economic development is negative, with higher levels of air pollution. Based on these findings, the policy implementation should focus on improving digitalization for pollution reduction, increasing energy efficiency, and sustainable supply chain management. Moreover, it is necessary to combine environmental objectives with industrial ones, especially in the construction sector, where economic growth should occur without violating the principles of environmental protection.

Suggested Citation

  • Xiu, Guangli, 2025. "Analyzing the impact of supply chain and digitalization in the Chinese economy: What is the role of energy consumption, government expenditure, and industrialization in environmental pollution?," Energy Economics, Elsevier, vol. 145(C).
  • Handle: RePEc:eee:eneeco:v:145:y:2025:i:c:s0140988325002361
    DOI: 10.1016/j.eneco.2025.108412
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988325002361
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.eneco.2025.108412?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Bennæs, Anders & Skogset, Martin & Svorkdal, Tormod & Fagerholt, Kjetil & Herlicka, Lisa & Meisel, Frank & Rickels, Wilfried, 2024. "Modeling a supply chain for carbon capture and offshore storage—A German–Norwegian case study," Open Access Publications from Kiel Institute for the World Economy 295104, Kiel Institute for the World Economy (IfW Kiel).
    2. Aleksy Kwilinski, 2024. "Understanding the nonlinear effect of digital technology development on CO2 reduction," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(5), pages 5797-5811, October.
    3. Kangni Lyu & Shuwang Yang & Kun Zheng & Yao Zhang, 2023. "How Does the Digital Economy Affect Carbon Emission Efficiency? Evidence from Energy Consumption and Industrial Value Chain," Energies, MDPI, vol. 16(2), pages 1-20, January.
    4. Piotr F. Borowski, 2021. "Digitization, Digital Twins, Blockchain, and Industry 4.0 as Elements of Management Process in Enterprises in the Energy Sector," Energies, MDPI, vol. 14(7), pages 1-20, March.
    5. Gyimah, Justice & Yao, Xilong & Tachega, Mark Awe & Sam Hayford, Isaac & Opoku-Mensah, Evans, 2022. "Renewable energy consumption and economic growth: New evidence from Ghana," Energy, Elsevier, vol. 248(C).
    6. Nabila Amin & Muhammad Salman Shabbir & Huaming Song & Kashif Abbass, 2024. "Renewable energy consumption and its impact on environmental quality: A pathway for achieving sustainable development goals in ASEAN countries," Energy & Environment, , vol. 35(2), pages 644-662, March.
    7. Hainmueller, Jens & Hazlett, Chad, 2014. "Kernel Regularized Least Squares: Reducing Misspecification Bias with a Flexible and Interpretable Machine Learning Approach," Political Analysis, Cambridge University Press, vol. 22(2), pages 143-168, April.
    8. Hui Fang & Chunyu Jiang & Tufail Hussain & Xiaoye Zhang & Qixin Huo, 2022. "Input Digitization of the Manufacturing Industry and Carbon Emission Intensity Based on Testing the World and Developing Countries," IJERPH, MDPI, vol. 19(19), pages 1-28, October.
    9. Jan Polcyn & Liton Chandra Voumik & Mohammad Ridwan & Samrat Ray & Viktoriia Vovk, 2023. "Evaluating the Influences of Health Expenditure, Energy Consumption, and Environmental Pollution on Life Expectancy in Asia," IJERPH, MDPI, vol. 20(5), pages 1-18, February.
    10. Hasan, Mohammad Maruf & Nan, Su & Waris, Umra, 2024. "Assessing the dynamics among oil consumption, ecological footprint, and renewable energy: Role of institutional quality in major oil-consuming countries," Resources Policy, Elsevier, vol. 90(C).
    11. Adel Ben Youssef & Mounir Dahmani, 2024. "Assessing the Impact of Digitalization, Tax Revenues, and Energy Resource Capacity on Environmental Quality: Fresh Evidence from CS-ARDL in the EKC Framework," Sustainability, MDPI, vol. 16(2), pages 1-23, January.
    12. Zhong Ren & Jie Zhang, 2023. "Digital Economy, Clean Energy Consumption, and High-Quality Economic Development: The Case of China," Sustainability, MDPI, vol. 15(18), pages 1-24, September.
    13. Elisa Di Febo & Eliana Angelini & Tu Le, 2024. "Environment and Digitalization: The New Paradigms in the European Stock Markets," Economies, MDPI, vol. 12(3), pages 1-15, March.
    14. Can Zhang & Umra Waris & Leren Qian & Muhammad Irfan & Mubeen Abdur Rehman, 2024. "Unleashing the dynamic linkages among natural resources, economic complexity, and sustainable economic growth: Evidence from G‐20 countries," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(4), pages 3736-3752, August.
    15. Sadiq, Muhammad & Paramaiah, Ch & joseph, Robinson & Dong, Ziguang & Nawaz, Muhammad Atif & Shukurullaevich, Nizomjon Khajimuratov, 2024. "Role of fintech, green finance, and natural resource rents in sustainable climate change in China. Mediating role of environmental regulations and government interventions in the pre-post COVID eras," Resources Policy, Elsevier, vol. 88(C).
    16. Shahbaz, Muhammad & Wang, Jianda & Dong, Kangyin & Zhao, Jun, 2022. "The impact of digital economy on energy transition across the globe: The mediating role of government governance," Renewable and Sustainable Energy Reviews, Elsevier, vol. 166(C).
    17. Aydin, Mucahit & Erdem, Azad, 2024. "Analyzing the impact of resource productivity, energy productivity, and renewable energy consumption on environmental quality in EU countries: The moderating role of productivity," Resources Policy, Elsevier, vol. 89(C).
    18. Jun Zhao & Xiao-yan Liu, 2024. "ICT, Supply Chain Digital Integration Capability, and Firm Financial Performance: The Antagonistic Effects of Perceived Government Support and Cognitive Constraints on Digital Transformation," SAGE Open, , vol. 14(2), pages 21582440241, April.
    19. Luo, Shuangcheng & Xiong, Zhiqiao & Liu, Jianjiang, 2024. "How does supply chain digitization affect green innovation? Evidence from a quasi-natural experiment in China," Energy Economics, Elsevier, vol. 136(C).
    20. Zhang, Xuan & Hasan, Mohammad Maruf & Waris, Umra, 2024. "Assessing the nexus between natural resources and government effectiveness: Role of green innovation in shaping environmental sustainability of BRICS nations," Resources Policy, Elsevier, vol. 93(C).
    21. You, Chen & Cifuentes-Faura, Javier & Liu, Xiaoqian & Wu, Jinqun, 2024. "Can the government environmental vertical reform reduce air pollution? A quasi-natural experiment in China," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 947-963.
    22. Sim, Nicholas & Zhou, Hongtao, 2015. "Oil prices, US stock return, and the dependence between their quantiles," Journal of Banking & Finance, Elsevier, vol. 55(C), pages 1-8.
    23. Essossinam Ali & Moukpè Gniniguè & Nadege Essossolim Awade, 2023. "Sectoral value chains and environmental pollution in Africa: can development policies target digitalization and structural transformation to enhance environmental governance?," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 12(2), pages 229-247, April.
    24. Serhiy Lyeonov & Tetyana Pimonenko & Yuriy Bilan & Dalia Štreimikienė & Grzegorz Mentel, 2019. "Assessment of Green Investments’ Impact on Sustainable Development: Linking Gross Domestic Product Per Capita, Greenhouse Gas Emissions and Renewable Energy," Energies, MDPI, vol. 12(20), pages 1-12, October.
    25. Umra Waris & Pallavi Sri, 2024. "Assessing the long-term impact of macroeconomic and environment dynamics: Does sustainable energy production shape the environmental landscape of south ASIAN nations?," Energy Technologies and Environment, Anser Press, vol. 2(1), pages 14-31, March.
    26. Shihai Liu & Jinsong Kuang & Dezhi Ding & Dag Øivind Madsen & Xiaofei Shi & Xianyang Fan, 2024. "Low-carbon governance, fiscal decentralization, and enterprise green development: Evidence from China," PLOS ONE, Public Library of Science, vol. 19(3), pages 1-27, March.
    27. Ruiliang Wang & Jie Yan & Wenfu Wang, 2024. "The economic and environmental effects of China’s environmental expenditure under financing constraints," PLOS ONE, Public Library of Science, vol. 19(7), pages 1-23, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhang, Mindan & Ma, Xiang & Mai, Shunhao & Qing, Lingli, 2025. "Drivers of supply chain, environmental innovation, and digital population: The role of inflation and renewable energy on GHG emission in Indonesia," Energy Economics, Elsevier, vol. 145(C).
    2. Han, Qiujie & Wang, Fei & Wang, Yushi & Guo, Feng, 2025. "How supply chain and digitalization are significant contributors to international trade? The role of renewable and energy intensity in global trade powerhouses' economies," Energy Economics, Elsevier, vol. 145(C).
    3. Wen, Chen & Xing, Yuhang & Wang, Tao & Liao, Sheng & Gao, Ke, 2025. "How do green supply chain management and renewable energy consumption influence carbon emissions in China and India? A comparative analysis," Energy Economics, Elsevier, vol. 143(C).
    4. Waris, Umra & Cui, Lixin & Abbas, Shujaat & Shoaib, Muhammad, 2025. "How has climate change been affected by electricity digitalization, supply chain digitalization, and green technologies? Building a path to environmentally sustainable development in E7 nations," Energy Economics, Elsevier, vol. 145(C).
    5. Ding, Hongjie & Feng, Muzi & Chen, Qian, 2025. "How supply chain disruptions, renewable energy consumption, and eco-innovation mitigate environmental degradation? A path towards sustainable development in France," Energy Economics, Elsevier, vol. 145(C).
    6. Cai, Helen Huifen & Yuan, Qiong & Tang, Shirley & Nguyen, Quang & Dai, Jie & Zheng, Wenxiu, 2025. "The moderating role of green innovation and ecofriendly goods in growth-greenhouse gas Nexus: A new policy dimension," Energy Economics, Elsevier, vol. 142(C).
    7. Liu, Xiaoxi & Zhan, Yunqiu & Si, Dingwen & Wang, Zhen, 2025. "Navigating renewable technological innovations and green supply chain management: Crafting a novel framework for boosting ecological quality in China," Energy Economics, Elsevier, vol. 142(C).
    8. Huang, Shuai & Tan, Huizhu, 2025. "Evaluating the effects of green supply chain, digital technologies, and energy prices on renewable energy innovations: A way forward for an emerging economy," Energy Economics, Elsevier, vol. 141(C).
    9. Li, Zhouzhi & Liu, Jiaguo, 2025. "Impact of supply chain digitalization, business enterprise R&D expenditure and government budget allocations for R&D: A roadmap towards carbon neutrality," Energy Economics, Elsevier, vol. 141(C).
    10. Chen, Jingping & Zhao, Chunzi & Liu, Shuang & Li, Yuchen, 2025. "How do digitalizing ICT and supply chain globalization affect renewable energy in ASEAN nations? The mediating role of sustainable environmental practices using the MMQR and PCSEs model," Energy Economics, Elsevier, vol. 142(C).
    11. Wang, Lingkang & Yang, Yiqu & Yang, Dongping & Zhou, Yaying, 2024. "Role of supply chain disruptions and digitalization on renewable energy innovation: Evidence from G7 nations," Energy Economics, Elsevier, vol. 140(C).
    12. Hasan, Mohammad Maruf & Li, Lanrui, 2025. "Do supply chain and digitalization Foster China's advancement in green development? An evidence from wavelet quantile regression and wavelet quantile correlation analysis," Energy Economics, Elsevier, vol. 142(C).
    13. Irfan, Muhammad & Quddus, Abdul & Shahzad, Farrukh & Wang, Yanfei, 2025. "Do ICT trade balances and natural resources foster carbon emissions? The role of government effectiveness and green technology innovation," Structural Change and Economic Dynamics, Elsevier, vol. 72(C), pages 320-329.
    14. Du, Xu & Fang, Shuanxi, 2025. "Does the lack of energy resilience a serious problem at the forefront of policy analysts? Role of supply chain digitalization and environmental law in OECD countries," Energy Economics, Elsevier, vol. 141(C).
    15. Liu, Hanzhen & Li, Ningxin & Zhao, Shenghan & Xue, Pengcheng & Zhu, Chenyuan & He, Yun, 2025. "The impact of supply chain and digitization on the development of environmental technologies: Unveiling the role of inflation and consumption in G7 nations," Energy Economics, Elsevier, vol. 142(C).
    16. Wu, Wei & Bi, Shuochen & Zhan, Yunqiu & Gu, Xiao, 2025. "Supply chain digitalization and energy efficiency (gas and oil): How do they contribute to achieving carbon neutrality targets?," Energy Economics, Elsevier, vol. 142(C).
    17. Ning, Jiajun & Xiong, Lixin, 2024. "Analysis of the dynamic evolution process of the digital transformation of renewable energy enterprises based on the cooperative and evolutionary game model," Energy, Elsevier, vol. 288(C).
    18. Alola, Andrew Adewale & Özkan, Oktay & Usman, Ojonugwa, 2023. "Examining crude oil price outlook amidst substitute energy price and household energy expenditure in the USA: A novel nonparametric multivariate QQR approach," Energy Economics, Elsevier, vol. 120(C).
    19. Yang, Yi & Zhen, Deyun & Meng, Fuyu, 2024. "Mineral resource management for a sustainable future: Unraveling the role of energy tax in driving green technologies and environmental quality," Resources Policy, Elsevier, vol. 94(C).
    20. Usman, Ojonugwa & Ozkan, Oktay & Koy, Ayben & Adebayo, Tomiwa Sunday, 2024. "Energy-related uncertainty shocks and inflation dynamics in the U.S: A multivariate quantile-on-quantile regression approach," Structural Change and Economic Dynamics, Elsevier, vol. 71(C), pages 235-247.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:145:y:2025:i:c:s0140988325002361. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.