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Does digital innovation improve carbon productivity? A new perspective based on industrial upgrading

Author

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  • Zhaohui Liu
  • Li Li
  • Jian Hou
  • Bingjun Li

Abstract

In the era of digital economy, digital innovation is an important path to promote the improvement of carbon productivity in developing countries. Based on China’s experience, this paper systematically constructs a digital innovation measurement system, and takes the heterogeneity threshold of industrial transformation upgrading as an entry point, and adopts a non-linear dynamic panel measurement model to empirically explore the mechanism of industrial transformation upgrading threshold of digital innovation on regional carbon productivity. The results show that the current development level of China’s digital innovation is relatively low, with significant regional heterogeneity. In particular, the impact of digital innovation on regional carbon productivity is subject to the heterogeneous threshold effect of industrial transformation upgrading: the low degree of industrial transformation upgrading hinders the role of digital innovation in improving carbon productivity to some extent, and with the further improvement of industrial transformation upgrading, the enabling effect of digital innovation can be effectively brought into play to improve carbon productivity. That is, digital innovation and regional carbon productivity present ‘U-shaped’ relationship. This paper has clarified the differential‘new phenomena’ in the process of promoting carbon productivity, providing new insights for achieving ‘carbon reduction and economic promotion’ in developing countries.

Suggested Citation

  • Zhaohui Liu & Li Li & Jian Hou & Bingjun Li, 2026. "Does digital innovation improve carbon productivity? A new perspective based on industrial upgrading," Applied Economics, Taylor & Francis Journals, vol. 58(4), pages 661-679, January.
    • Handle: RePEc:taf:applec:v:58:y:2026:i:4:p:661-679
    DOI: 10.1080/00036846.2025.2455593
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