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Can digital innovation promote regional green consumption?

Author

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  • Shan, Jun
  • Zhao, Tianyu
  • Xu, Tianyu
  • Xue, Jia

Abstract

China’s “dual carbon” goals demand a fundamental shift toward sustainable consumption; however, the role of emerging digital economy in this transition remains empirically underexplored. Using panel data from 30 Chinese provinces from 2011 to 2023, this study applies a two-way fixed-effects model to assess how digital innovation influences regional green consumption. The findings reveal a multifaceted relationship: digital innovation greatly boosts green consumption, both directly and indirectly by improving the consumption structure. This positive effect is significantly strengthened by stricter environmental regulations. However, the impact is strong in the more developed eastern and central regions but statistically insignificant in the developing western region. These findings are confirmed through various econometric tests, including instrumental variable analyses and sensitivity checks. The study concludes that digital innovation for sustainability needs tailored, region-specific policies rather than a one-size-fits-all approach, emphasizing the need to align technological advancement with targeted regulatory support and foundational economic conditions.

Suggested Citation

  • Shan, Jun & Zhao, Tianyu & Xu, Tianyu & Xue, Jia, 2026. "Can digital innovation promote regional green consumption?," Finance Research Letters, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:finlet:v:92:y:2026:i:c:s1544612325026844
    DOI: 10.1016/j.frl.2025.109435
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