IDEAS home Printed from https://ideas.repec.org/a/sae/engenv/v35y2024i1p23-46.html

The impact of digitalization on green economic efficiency: Empirical evidence from city-level panel data in China

Author

Listed:
  • Chien-Chiang Lee
  • Zhi-Wen He
  • Huwei Wen

Abstract

The digital transformation of global economic and social activities brought about by advanced information and communication technology (ICT) may have a profound impact on sustainable economic development. This research measures the digitalization of the economy and society in cities of China based on Internet-related indicators and digital financial development and investigates the economic and environmental effects of their digitalization. The empirical results show that digitalization has significantly improved green economic efficiency (GEE), and this finding remains valid after a series of robust analyses. However, there is regional heterogeneity in the improvement effect of GEE. The green effect of digitalization is significant only in the cities with a high degree of economic servitization, capital-abundant cities, and eastern cities. Although digitalization has promoted the green development of the urban economy, it also has a negative spatial spillover effect on the GEE of neighboring cities. One explanation is that cities are shifting polluting industries to other areas during the process of digital transformation.

Suggested Citation

  • Chien-Chiang Lee & Zhi-Wen He & Huwei Wen, 2024. "The impact of digitalization on green economic efficiency: Empirical evidence from city-level panel data in China," Energy & Environment, , vol. 35(1), pages 23-46, February.
    • Handle: RePEc:sae:engenv:v:35:y:2024:i:1:p:23-46
    DOI: 10.1177/0958305X221124225
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0958305X221124225
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0958305X221124225?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
    ---><---

    References listed on IDEAS

    as
    1. Zhang, Mingming & Zhang, Shichang & Lee, Chien-Chiang & Zhou, Dequn, 2021. "Effects of trade openness on renewable energy consumption in OECD countries: New insights from panel smooth transition regression modelling," Energy Economics, Elsevier, vol. 104(C).
    2. Luo, Kang & Liu, Yaobin & Chen, Pei-Fen & Zeng, Mingli, 2022. "Assessing the impact of digital economy on green development efficiency in the Yangtze River Economic Belt," Energy Economics, Elsevier, vol. 112(C).
    3. Bai, Caiquan & Feng, Chen & Du, Kerui & Wang, Yuansheng & Gong, Yuan, 2020. "Understanding spatial-temporal evolution of renewable energy technology innovation in China: Evidence from convergence analysis," Energy Policy, Elsevier, vol. 143(C).
    4. Zihanxin Li & Nuoyan Li & Huwei Wen, 2021. "Digital Economy and Environmental Quality: Evidence from 217 Cities in China," Sustainability, MDPI, vol. 13(14), pages 1-20, July.
    5. Zhou, Xiaoyong & Zhou, Dequn & Wang, Qunwei, 2018. "How does information and communication technology affect China's energy intensity? A three-tier structural decomposition analysis," Energy, Elsevier, vol. 151(C), pages 748-759.
    6. Murtishaw, Scott & Schipper, Lee, 2001. "Disaggregated analysis of US energy consumption in the 1990s: evidence of the effects of the internet and rapid economic growth," Energy Policy, Elsevier, vol. 29(15), pages 1335-1356, December.
    7. Juan Lin & Zhou Yu & Yehua Dennis Wei & Mingfeng Wang, 2017. "Internet Access, Spillover and Regional Development in China," Sustainability, MDPI, vol. 9(6), pages 1-18, June.
    8. Wen, Huwei & Lee, Chien-Chiang & Zhou, Fengxiu, 2022. "How does fiscal policy uncertainty affect corporate innovation investment? Evidence from China's new energy industry," Energy Economics, Elsevier, vol. 105(C).
    9. Yi Li, 2020. "Internet Development and Structural Transformation: Evidence from China," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 10(1), pages 1-8.
    10. Ren, Siyu & Hao, Yu & Xu, Lu & Wu, Haitao & Ba, Ning, 2021. "Digitalization and energy: How does internet development affect China's energy consumption?," Energy Economics, Elsevier, vol. 98(C).
    11. repec:aen:journl:ej44-2-lee is not listed on IDEAS
    12. Shen, Jim Huangnan & Long, Zhiming & Lee, Chien-Chiang & Zhang, Jun, 2022. "Comparative advantage, endowment structure, and trade imbalances," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 365-375.
    13. Cho, Youngsang & Lee, Jongsu & Kim, Tai-Yoo, 2007. "The impact of ICT investment and energy price on industrial electricity demand: Dynamic growth model approach," Energy Policy, Elsevier, vol. 35(9), pages 4730-4738, September.
    14. DeStefano, Timothy & Kneller, Richard & Timmis, Jonathan, 2018. "Broadband infrastructure, ICT use and firm performance: Evidence for UK firms," Journal of Economic Behavior & Organization, Elsevier, vol. 155(C), pages 110-139.
    15. Yuan, Huaxi & Feng, Yidai & Lee, Chien-Chiang & Cen, Yan, 2020. "How does manufacturing agglomeration affect green economic efficiency?," Energy Economics, Elsevier, vol. 92(C).
    16. Lee, Chien-Chiang & Wang, Chang-song, 2022. "Financial development, technological innovation and energy security: Evidence from Chinese provincial experience," Energy Economics, Elsevier, vol. 112(C).
    17. Kevin J. Stiroh & Dale W. Jorgenson, 1999. "Information Technology and Growth," American Economic Review, American Economic Association, vol. 89(2), pages 109-115, May.
    18. Yin Feng & Jinhua Cheng & Jun Shen & Han Sun, 2019. "Spatial Effects of Air Pollution on Public Health in China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(1), pages 229-250, May.
    19. Serdar Yilmaz & Kingley E. Haynes & Mustafa Dinc, 2002. "Geographic and Network Neighbors: Spillover Effects of Telecommunications Infrastructure," Journal of Regional Science, Wiley Blackwell, vol. 42(2), pages 339-360, May.
    20. Lee, Chi-Chuan & Lee, Chien-Chiang, 2022. "How does green finance affect green total factor productivity? Evidence from China," Energy Economics, Elsevier, vol. 107(C).
    21. Wen Huwei & Chen Shuai & Lee Chien-Chiang, 2023. "Impact of Low-carbon City Construction on Financing, Investment, and Total Factor Productivity of Energy-intensive Enterprises," The Energy Journal, , vol. 44(2), pages 79-102, March.
    22. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 2001. "Is Free Trade Good for the Environment?," American Economic Review, American Economic Association, vol. 91(4), pages 877-908, September.
    23. Li, Mingquan & Patiño-Echeverri, Dalia & Zhang, Junfeng (Jim), 2019. "Policies to promote energy efficiency and air emissions reductions in China's electric power generation sector during the 11th and 12th five-year plan periods: Achievements, remaining challenges, and opportunities," Energy Policy, Elsevier, vol. 125(C), pages 429-444.
    24. Wu, Yizhong & Lee, Chien-Chiang & Lee, Chi-Chuan & Peng, Diyun, 2022. "Geographic proximity and corporate investment efficiency: Evidence from high-speed rail construction in China," Journal of Banking & Finance, Elsevier, vol. 140(C).
    25. Pradhan, Rudra P. & Arvin, Mak B. & Norman, Neville R., 2015. "The dynamics of information and communications technologies infrastructure, economic growth, and financial development: Evidence from Asian countries," Technology in Society, Elsevier, vol. 42(C), pages 135-149.
    26. Myovella, Godwin & Karacuka, Mehmet & Haucap, Justus, 2020. "Digitalization and economic growth: A comparative analysis of Sub-Saharan Africa and OECD economies," Telecommunications Policy, Elsevier, vol. 44(2).
    27. Jinlin Li & Litai Chen & Ying Chen & Jiawen He, 2022. "Digital economy, technological innovation, and green economic efficiency—Empirical evidence from 277 cities in China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(3), pages 616-629, April.
    28. Martínez-Caro, Eva & Cegarra-Navarro, Juan Gabriel & Alfonso-Ruiz, Francisco Javier, 2020. "Digital technologies and firm performance: The role of digital organisational culture," Technological Forecasting and Social Change, Elsevier, vol. 154(C).
    29. Lee, Chien-Chiang & Xing, Wenwu & Lee, Chi-Chuan, 2022. "The impact of energy security on income inequality: The key role of economic development," Energy, Elsevier, vol. 248(C).
    30. Liu, Min & Lee, Chien-Chiang, 2022. "Is gold a long-run hedge, diversifier, or safe haven for oil? Empirical evidence based on DCC-MIDAS," Resources Policy, Elsevier, vol. 76(C).
    31. Habibi, Fateh & Zabardast, Mohamad Amjad, 2020. "Digitalization, education and economic growth: A comparative analysis of Middle East and OECD countries," Technology in Society, Elsevier, vol. 63(C).
    32. Wen-Cheng Lu, 2018. "The impacts of information and communication technology, energy consumption, financial development, and economic growth on carbon dioxide emissions in 12 Asian countries," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 23(8), pages 1351-1365, December.
    33. You, Wanhai & Zhang, Yue & Lee, Chien-Chiang, 2022. "The dynamic impact of economic growth and economic complexity on CO2 emissions: An advanced panel data estimation," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 112-128.
    34. Wu, Haitao & Hao, Yu & Ren, Siyu & Yang, Xiaodong & Xie, Guo, 2021. "Does internet development improve green total factor energy efficiency? Evidence from China," Energy Policy, Elsevier, vol. 153(C).
    35. Tone, Kaoru, 2001. "A slacks-based measure of efficiency in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 130(3), pages 498-509, May.
    36. Lange, Steffen & Pohl, Johanna & Santarius, Tilman, 2020. "Digitalization and energy consumption. Does ICT reduce energy demand?," Ecological Economics, Elsevier, vol. 176(C).
    37. Chen, Yang & Cheng, Liang & Lee, Chien-Chiang, 2022. "How does the use of industrial robots affect the ecological footprint? International evidence," Ecological Economics, Elsevier, vol. 198(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Kai-Hua & Jiang, Xin-Yu & Tang, Yun, 2025. "Artificial intelligence, cloud computing, blockchain, and the energy market in the era of energy transition," Energy Economics, Elsevier, vol. 151(C).
    2. Gao, Yuxin & Gao, Ming, 2024. "Did China's energy consumption permit trading scheme improve green economic efficiency? Prefecture-level evidence from China," Energy, Elsevier, vol. 308(C).
    3. Zhou, Mengling & Du, Xinyi, 2025. "Digital government and air pollution inequality: Evidence from Chinese cities," Economic Modelling, Elsevier, vol. 152(C).
    4. Congxian He & Ruiqing Shi & Huwei Wen, 2024. "The Peer Effects of Residents’ Carbon Emission Behavior: An Empirical Analysis in China," Sustainability, MDPI, vol. 16(21), pages 1-21, October.
    5. Hala Mohamed Sh Elmanaei & Wagdi M. S. Khalifa & Ayşen Berberoğlu, 2024. "Unpacking How Natural Gas, Digital Growth, and Hydro-Based Energy Sources Impact Ecological Sustainability in Egypt," Energies, MDPI, vol. 17(24), pages 1-16, December.
    6. Xinyi Gu & Jianmin Li & Farzan Yahya & Muhammad Waqas & Amad Rashid, 2025. "Unintended consequences of trade in environmental innovation: Agricultural emissions, sectoral leakage, and the Kuznets curve hypothesis," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 71(6), pages 298-307.
    7. Stevovic Ivan & Hadrovic Sabahudin & Jovanovic Mihailo, 2024. "Green Economy And Holistic Planning By Artificial Intelligenceapplication," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 5, pages 184-188, October.
    8. Bie, Fan & Zhou, Luyao & Liu, Shuo & Yang, Tao, 2024. "Government digital transformation, resource curse and green total factor energy efficiency in Chinese cities," Resources Policy, Elsevier, vol. 92(C).

    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. Lee, Chien-Chiang & He, Zhi-Wen & Xiao, Fu, 2022. "How does information and communication technology affect renewable energy technology innovation? International evidence," Renewable Energy, Elsevier, vol. 200(C), pages 546-557.
    2. Wen, Huwei & Liang, Weitao & Lee, Chien-Chiang, 2022. "Urban broadband infrastructure and green total-factor energy efficiency in China," Utilities Policy, Elsevier, vol. 79(C).
    3. Lee, Chien-Chiang & He, Zhi-Wen, 2022. "Natural resources and green economic growth: An analysis based on heterogeneous growth paths," Resources Policy, Elsevier, vol. 79(C).
    4. Zhou, Fengxiu & Wen, Huwei & Lee, Chien-Chiang, 2022. "Broadband infrastructure and export growth," Telecommunications Policy, Elsevier, vol. 46(5).
    5. Jinlin Li & Litai Chen & Ying Chen & Jiawen He, 2022. "Digital economy, technological innovation, and green economic efficiency—Empirical evidence from 277 cities in China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(3), pages 616-629, April.
    6. Lv, Chengchao & Song, Jie & Lee, Chien-Chiang, 2022. "Can digital finance narrow the regional disparities in the quality of economic growth? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 502-521.
    7. Wen, Huwei & Zhong, Qiming & Lee, Chien-Chiang, 2022. "Digitalization, competition strategy and corporate innovation: Evidence from Chinese manufacturing listed companies," International Review of Financial Analysis, Elsevier, vol. 82(C).
    8. Hussain, Jafar & Lee, Chien-Chiang & Chen, Yongxiu, 2022. "Optimal green technology investment and emission reduction in emissions generating companies under the support of green bond and subsidy," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    9. Lee, Chien-Chiang & Yuan, Zihao & Lee, Chi-Chuan & Chang, Yu-Fang, 2022. "The impact of renewable energy technology innovation on energy poverty: Does climate risk matter?," Energy Economics, Elsevier, vol. 116(C).
    10. Zhu, Chen & Lee, Chien-Chiang, 2022. "The effects of low-carbon pilot policy on technological innovation: Evidence from prefecture-level data in China," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    11. Luo, Kang & Liu, Yaobin & Chen, Pei-Fen & Zeng, Mingli, 2022. "Assessing the impact of digital economy on green development efficiency in the Yangtze River Economic Belt," Energy Economics, Elsevier, vol. 112(C).
    12. Xu, Jin-Jin & Wang, Hai-Jie & Tang, Kai, 2022. "The sustainability of industrial structure on green eco-efficiency in the Yellow River Basin," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 775-788.
    13. Wen, Huwei & Wen, Changyong & Lee, Chien-Chiang, 2022. "Impact of digitalization and environmental regulation on total factor productivity," Information Economics and Policy, Elsevier, vol. 61(C).
    14. Xiujin Guo & Zhengming Wang, 2024. "How does the digital economy affect the green development of China’s industry?," PLOS ONE, Public Library of Science, vol. 19(9), pages 1-21, September.
    15. Tiwari, Aviral Kumar & Abakah, Emmanuel Joel Aikins & Adewuyi, Adeolu O. & Lee, Chien-Chiang, 2022. "Quantile risk spillovers between energy and agricultural commodity markets: Evidence from pre and during COVID-19 outbreak," Energy Economics, Elsevier, vol. 113(C).
    16. Jafar Hussain & Chien‐Chiang Lee, 2022. "A green path towards sustainable development: Optimal behavior of the duopoly game model with carbon neutrality instruments," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(6), pages 1523-1541, December.
    17. Zhang, Wei & Liu, Xuemeng & Wang, Die & Zhou, Jianping, 2022. "Digital economy and carbon emission performance: Evidence at China's city level," Energy Policy, Elsevier, vol. 165(C).
    18. Lin, Boqiang & Huang, Chenchen, 2023. "How will promoting the digital economy affect electricity intensity?," Energy Policy, Elsevier, vol. 173(C).
    19. Lee, Chien-Chiang & Wang, Chang-song, 2022. "Financial development, technological innovation and energy security: Evidence from Chinese provincial experience," Energy Economics, Elsevier, vol. 112(C).
    20. Wenhui Luo & Gennian Tang & Peiling Yang & Chunxia Jia & Ruize Yang, 2024. "RETRACTED ARTICLE: Examining Digital Economy’s Role in Urban Green Development: A Study of the Yangtze River Delta Region," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 11250-11285, September.

    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:sae:engenv:v:35:y:2024:i:1:p:23-46. 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: SAGE Publications (email available below). General contact details of provider: .

    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.