The Impact of Digital Governance on Energy Efficiency: Evidence from E-Government Pilot City in China

The digital economy plays a transformative role in enhancing energy efficiency and promoting sustainable development globally. As a key manifestation of digital governance, e-government has emerged as a vital instrument for accelerating the digital transformation of public administration and modernizing governance systems. This study examines the impact of digital governance on urban energy efficiency by analyzing China’s E-Government Pilot City (EPC) policy as a quasi-natural experiment. Using a Difference-in-Differences (DID) approach and balanced panel data from 282 prefecture-level cities (2006–2020), we find that the EPC policy significantly improves total factor energy efficiency (TFEE) by an average of 2.60%. Mechanism analyses reveal that digital governance enhances energy efficiency through industrial structure upgrading, green technology innovation, and foreign direct investment attraction. Heterogeneity analyses indicate that the policy’s benefits are more pronounced in larger, non-resource-based, and non-old industrial base cities, as well as in regions with stronger institutional environments and advanced digital infrastructure. However, spatial spillover effects suggest that while the EPC policy boosts local energy efficiency, it may inadvertently reduce efficiency in neighboring areas due to competitive dynamics and industrial relocation. These findings underscore the importance of tailored and coordinated policy designs to maximize the energy efficiency benefits of digital governance.