Does the digital economy promote environmental performance increase? Evidence from China 258 cities

With the rapid expansion of the digital economy, it is critical to investigate the influence and mechanisms of digital economy on environmental pollution in order to promote green urban economic growth. Based on data from 258 Chinese cities between 2005 and 2019, we employed fixed effects models, moderating effects models, and spatial Durbin models to evaluate the impact of the digital economy on environmental performance. The result is as follows. Firstly, the digital economy increases environmental performance dramatically. Secondly, in terms of heterogeneity, the influence of the digital economy on environmental performance is bigger after the 13th Five-Year Plan, and its promoting effect is stronger in cities with low environmental regulation intensity, high government intervention, and large market size. Thirdly, from the standpoint of the impact mechanism, optimizing industrial structure and increasing marketization can greatly boost the promotion effect. Fourthly, because the digital economy has strong spatial spillover effects, it not only improves local environmental performance but also greatly improves the environmental performance of nearby cities through spatial spillover effects. Finally, this study proposes strategies for improving the building of urban network infrastructure, adopting diversified digital economy regulations based on local situations, and implementing regional joint prevention and control. These findings presents a new theoretical foundation for the digital economy's contribution to environmental governance.