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From Digital Clusters to Urban Environmental Sustainability: New Mechanisms and Spillover Effects

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  • Miaomiao Tao
  • Marcus Jude P. San Pedro
  • David Roubaud
  • Aviral Kumar Tiwari

Abstract

The burgeoning concentration of digital industries has garnered considerable scholarly interest as a catalyst for economic dynamism and technological innovation. However, its environmental ramifications—particularly regarding pollutant emissions—remain insufficiently examined. This study probes the ecological consequences of digital industry agglomeration, specifically emphasizing sulfur dioxide (SO2) emissions, drawing upon a comprehensive city‐level dataset from China. Empirical findings reveal that digital agglomeration markedly suppresses SO2 emissions, with the most pronounced effects observed in eastern municipalities, non‐resource‐dependent urban locales, and cities situated beyond conventional industrial corridors. Mediation analyses elucidate that enhanced supply chain resilience (SCR) is a key conduit for emission abatement. Nevertheless, inefficiencies arising from capital and labor misallocation partially offset these gains. Furthermore, spatial econometric analysis confirms the existence of positive spillover effects, whereby emission reductions extend beyond the agglomerated city to adjacent regions. Our analysis also uncovers a non‐linear moderating role of human capital in shaping the environmental efficacy of digital agglomeration, indicating that augmenting human capital stock is pivotal for amplifying green dividends. These insights underscore the necessity for region‐specific and capability‐sensitive policy frameworks to harness the environmental co‐benefits of digital industrial clustering fully.

Suggested Citation

  • Miaomiao Tao & Marcus Jude P. San Pedro & David Roubaud & Aviral Kumar Tiwari, 2025. "From Digital Clusters to Urban Environmental Sustainability: New Mechanisms and Spillover Effects," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(5), pages 7363-7386, October.
    • Handle: RePEc:wly:sustdv:v:33:y:2025:i:5:p:7363-7386
    DOI: 10.1002/sd.3523
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