Does the digital economy enhance green total factor productivity in China? The evidence from a national big data comprehensive pilot zone

Digital economy has become a major driver of the green transformation of the economy. The “National Big Data Comprehensive Pilot Zone” policy is taken as a quasi-natural experiment. The Difference-in-Differences model is employed to explore the impact of digital economy on green total factor productivity, and the heterogeneity of this impact is further explored. The mechanism test model is applied to investigate its indirect transmission mechanism. It is found that digital economy significantly enhances green total factor productivity. Further, the impact is larger and more significant in the mid-western, non-resource-based, and large cities, whereas it is smaller or insignificant in the eastern, resource-based, and small and medium-sized cities. Results of mechanism analysis show that digital economy enhances green total factor productivity through the transmission channels of technological innovation, industrial structure optimization, and resource misallocation. Policy recommendations are provided on the basis of these results to establish the environment and digital economy that are mutually beneficial.