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How Environmental Regulation, Digital Development and Technological Innovation Affect China’s Green Economy Performance: Evidence from Dynamic Thresholds and System GMM Panel Data Approaches

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  • Lijiang Jia

    (College of Economics and Management, Harbin Engineering University, Harbin 150001, China)

  • Xiaoli Hu

    (College of Economics and Management, Harbin Engineering University, Harbin 150001, China)

  • Zhongwei Zhao

    (College of Economics and Management, Weifang University of Science and Technology, Weifang 262700, China)

  • Bin He

    (Center for China Public Sector Economy Research, Jilin University, Changchun 130015, China)

  • Weiming Liu

    (Institute of Jiangxi Economic Development and Reform, Jiangxi University of Finance and Economics, Nanchang 330013, China)

Abstract

Based on the background of China’s “carbon neutral” policy and the booming digitalization, how does environmental regulation affect green economy performance? The existing literature has studied the impact of energy consumption on green economic performance. However, the literature has ignored the impact of carbon dioxide emissions on China’s green economy performance. In this regard, this research uses the non-radial distance function (NDDF) to calculate the green economic performance of China’s prefecture-level cities, and uses the dynamic panel threshold model and the systematic GMM method to study the nonlinear impacts and mechanisms of environmental regulation, digital development, technological innovation, and industrial structure upgrade on green economic performance. The panel data set contains 228 Chinese cities from 2003 to 2019. The following findings are established: first, after adding carbon dioxide emissions to China’s green economy performance, the environmental performance was reduced, and the green economy performance was also reduced. Second, the impact of environmental regulations on green economic performance has a double-threshold effect, with threshold values of −0.267 and 3.602, and this double-threshold effect has temporal and regional heterogeneity. Third, environmental regulations of different intensities have a single-threshold effect between digital development, technological innovation, and industrial structure upgrade, with threshold values of 2.955, 3.957, and 2.249, respectively. Fourth, digital development, technological innovation, and industrial structure upgrade promote green economic performance. Fifth, environmental regulation acts on green economic performance through the transmission of digitalization, technological innovation, and industrial structure upgrade. Based on these empirical findings, this research suggests that Chinese local governments should appropriately increase the intensity of environmental regulations, strengthen the digital application and technological innovation, and promote the upgrading of industrial structure to achieve the improvement of urban green economic performance.

Suggested Citation

  • Lijiang Jia & Xiaoli Hu & Zhongwei Zhao & Bin He & Weiming Liu, 2022. "How Environmental Regulation, Digital Development and Technological Innovation Affect China’s Green Economy Performance: Evidence from Dynamic Thresholds and System GMM Panel Data Approaches," Energies, MDPI, vol. 15(3), pages 1-25, January.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:3:p:884-:d:734336
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    References listed on IDEAS

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    1. Grossman, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
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    5. Wenhui Luo & Gennian Tang & Peiling Yang & Chunxia Jia & Ruize Yang, 2024. "Examining Digital Economy’s Role in Urban Green Development: A Study of the Yangtze River Delta Region," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 11250-11285, September.
    6. Lin, Boqiang & Huang, Chenchen, 2023. "How will promoting the digital economy affect electricity intensity?," Energy Policy, Elsevier, vol. 173(C).
    7. Xiang Cheng & Xiaohui Chen, 2024. "The digital economy and power consumption: empirical analysis based on consumption intensity in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(8), pages 19755-19777, August.
    8. Yunyan Jiang & Feng Deng, 2022. "Multi-Dimensional Threshold Effects of the Digital Economy on Green Economic Growth?—New Evidence from China," Sustainability, MDPI, vol. 14(19), pages 1-22, October.
    9. Zhao, Shuliang & Teng, Linjiao & Arkorful, Vincent Ekow & Hu, Hui, 2023. "Impacts of digital government on regional eco-innovation: Moderating role of dual environmental regulations," Technological Forecasting and Social Change, Elsevier, vol. 196(C).
    10. Tu, Yu-Te, 2024. "Drivers of Environmental Performance in Asian economies: Do natural resources, green innovation and Fintech really matter?," Resources Policy, Elsevier, vol. 90(C).
    11. Mutascu, Mihai & Horky, Florian & Strango, Cristina, 2023. "Good or bad? Digitalisation and green preferences," Energy Economics, Elsevier, vol. 121(C).
    12. Guangzhi Qi & Zhibao Wang & Zhixiu Wang & Lijie Wei, 2022. "Has Industrial Upgrading Improved Air Pollution?—Evidence from China’s Digital Economy," Sustainability, MDPI, vol. 14(14), pages 1-18, July.
    13. Mengjuan Zhang & Mingxing Li & Hongzheng Sun & Fredrick Oteng Agyeman & Hira Salah ud din Khan & Zedong Zhang, 2022. "Investigation of Nexus between Knowledge Learning and Enterprise Green Innovation Based on Meta-Analysis with a Focus on China," Energies, MDPI, vol. 15(4), pages 1-22, February.
    14. Bei Liu & Yukun Li & Xiaoya Tian & Lipeng Sun & Pishi Xiu, 2023. "Can Digital Economy Development Contribute to the Low-Carbon Transition? Evidence from the City Level in China," IJERPH, MDPI, vol. 20(3), pages 1-19, February.
    15. Jianshi Wang & Yu Cheng & Chengxin Wang, 2022. "Environmental Regulation, Scientific and Technological Innovation, and Industrial Structure Upgrading in the Yellow River Basin, China," IJERPH, MDPI, vol. 19(24), pages 1-17, December.
    16. Zhao, Haoran & Guo, Sen, 2023. "Analysis of the non-linear impact of digital economy development on energy intensity: Empirical research based on the PSTR model," Energy, Elsevier, vol. 282(C).
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