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Does the Digital Economy Increase Green TFP in Cities?

Author

Listed:
  • Chuanyu Zhao

    (Business School, Ningbo University, Nningbo 315211, China)

  • Zhongquan Liu

    (Center for Innovation-Driven Development, National Development and Reform Commission, People’s Republic of China, Beijing 100038, China
    Center for Digital Economy Research and Development, National Development and Reform Commission, People’s Republic of China, Beijing 100038, China)

  • Xianfeng Yan

    (School of Management, Taizhou Vocational and Technical College, Taizhou 318000, China)

Abstract

COVID-19 accelerated the growth of the digital economy and digital transformation across the globe. Meanwhile, it also created a higher demand for productivity in the real economy. Hence, the correlation between the digital economy and green productivity is worth studying as COVID-19 prevention becomes the norm. The digital economy overcomes the limitations imposed by traditional factors of production on economic growth and empowers innovative R&D and resource allocation in all aspects. This study delved into the digital economy by focusing on its green value at different levels of development. The study gathered the green-productivity indices and the principal components of the digital economy for each prefecture-level city in China from 2011 to 2019 and meticulously portrayed their trends in spatial and temporal figures. Meanwhile, regression models were used to verify the mechanism through which digital-economy development influences the changes in green productivity. The results showed that: (1) a higher level of digital economy helps to increase urban green total-factor productivity (GTFP) and that the conclusions of this paper still held after potential endogeneity problems were solved through the instrumental-variables approach; (2) the digital economy will drive an increase in urban GTFP by upgrading firms’ production technologies and that digital-economy development encourages green patent applications from firms; and (3) as the digital economy develops, it will also drive urban GTFP increases by removing polluting enterprises from the market and that the higher the level of digital-economy development, the greater the number and probability of polluting enterprises exiting the market. In view of this study’s results, the government should increase the importance of the digital economy, strengthen the role of the digital economy in promoting urban green development, and provide more guidance on regional green development with the help of the digital economy.

Suggested Citation

  • Chuanyu Zhao & Zhongquan Liu & Xianfeng Yan, 2023. "Does the Digital Economy Increase Green TFP in Cities?," IJERPH, MDPI, vol. 20(2), pages 1-22, January.
    • Handle: RePEc:gam:jijerp:v:20:y:2023:i:2:p:1442-:d:1034258
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    References listed on IDEAS

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    Cited by:

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    4. Wenjun Ge & Siyuan Wu & Derong Yang, 2024. "Who are the genuine contributors to economic development under environmental regulation? Evidence from total factor productivity in the three industries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(9), pages 22801-22838, September.
    5. Yihua Zhang & Xinxin Hong & Yuan Wang, 2023. "Study on the Coupled and Coordinated Development and Evolution of Digital Economy and Green Technology Innovation," Sustainability, MDPI, vol. 15(10), pages 1-23, May.
    6. Škare, Marinko & Gavurova, Beata & Porada-Rochon, Malgorzata, 2024. "Digitalization and carbon footprint: Building a path to a sustainable economic growth," Technological Forecasting and Social Change, Elsevier, vol. 199(C).
    7. Kangjuan Lv & Jiaqi Li & Ye Zhao, 2023. "Can Internet Construction Promote Urban Green Development? A Quasi-Natural Experiment from the “Broadband China”," IJERPH, MDPI, vol. 20(6), pages 1-21, March.
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    9. Xing Zhang & Jian Zhong & Huanfang Wang, 2023. "Does the Development of Digital Economy Affect Environmental Pollution?," Sustainability, MDPI, vol. 15(12), pages 1-18, June.

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