Assessing the potential of digital technology: an integrated measurement of economic, environmental, and social performance

Given the rate of evolution in digital technology, it is important to assess its impact on different performance metrics. Despite relatively extensive research on the role of digital technology in driving economic and environmental performance, the number of studies assessing its impact on social wellbeing remains relatively limited. To bridge this gap, this paper proposes a three-pillar model integrating social indicators into the conventional two-dimensional performance evaluation framework. We rely on the directional distance function and a linear programming methodology to define a benchmark model incorporating economic, environmental, and social indicators. Our approach is operationalized using a sample of 280 Chinese prefecture-level cities from 2003 to 2019. Our results suggest an overall improvement in inclusive green growth across China, albeit with notable regional variations among its different economic zones. Results from spatial regression provide evidence of digital technology's predominantly positive role in driving inclusive green growth, particularly across its economic dimension. Furthermore, digital technology might not reduce carbon emissions directly. As for the social performance pillar, while digital technology help promote social stability it simultaneously inhibits performance expressed in terms of access to healthcare and education.