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Can the digital economy enhance carbon emission efficiency? Evidence from 269 cities in China

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  • Xia, Weifeng
  • Ruan, Zhiyu
  • Ma, Shenglin
  • Zhao, Jin
  • Yan, Jiale

Abstract

The digital economy has become a crucial component in driving economic development in China. As the scale of the digital economy continues to expand, concerns regarding carbon emissions generated in this sector have emerged. However, the impact of the digital economy on carbon emissions remains unclear. This paper aims to explore the intrinsic relationship between digital economic development and carbon emissions, contributing to the realisation of high-speed development under the dual carbon policy. Using panel data from 269 Chinese cities from 2013 to 2022, this study constructs a digital economy development index using the entropy weight method and measures carbon emission efficiency with the super-efficiency EBM-GML model. The empirical results indicate that the level of digital economy development significantly enhances carbon emission efficiency. This finding remains robust after a series of stability checks. Additionally, the overall development level of the digital economy has progressively increased, though significant regional disparities exist. Mechanism analysis reveals that the digital economy primarily exerts a positive influence on carbon emission performance through green technology innovation and optimisation of industrial structure. Heterogeneity analysis shows that in eastern cities, cities with abundant human capital, and cities with low fiscal pressure, the digital economy can significantly improve carbon emission performance.

Suggested Citation

  • Xia, Weifeng & Ruan, Zhiyu & Ma, Shenglin & Zhao, Jin & Yan, Jiale, 2025. "Can the digital economy enhance carbon emission efficiency? Evidence from 269 cities in China," International Review of Economics & Finance, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:reveco:v:97:y:2025:i:c:s1059056024008074
    DOI: 10.1016/j.iref.2024.103815
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