Can Internet development improve the energy efficiency of firms: Empirical evidence from China

Based on macro and micro matched data, this paper uses a fixed effects model, subsamples regression and the instrumental variable method to analyze the degree to which Internet development influences energy efficiency, the mechanism for that influence, and the spillover effect of Internet development. The findings show that for every 1 % increase in the Internet development index, the energy efficiency of firms increases by approximately 0.38 %. Robustness analysis and endogeneity analysis also verify that Internet development is conducive to improving the energy efficiency of firms. The internal mechanism analysis shows that Internet development can improve the energy efficiency of Chinese firms and realize an energy-saving effect by correcting the misallocation of resources and promoting technological innovation. In addition, this paper finds that for every 1 % increase in the Internet development index in other cities and leading cities in the province, the energy efficiency of local firms increases by approximately 0.10 % and 0.026 %, respectively, which supports the spillover effect of Internet development in China. The findings of the paper can help promote the deep integration of the Internet and manufacturing technology in China, facilitating manufacturing industry development in an intelligent and energy-saving direction.