Nexus Among Digital Economy, Green Innovation, and Green Development: Evidence from China

Abstract

ABSTRACTGreen development is an essential requirement for the high-quality development. In the context of the new round of technological revolution, the digital economy has injected new momentum into China’s high-quality economic development. This article aims to clarify the relationships among digital economy, green innovation, and green development using Westerlund and Edgerton (2007) cointegration test as well as pooled mean group (PMG) estimation and utilizing yearly data from 274 cities in China from 2011 to 2019. Overall, the results confirm the existence of cointegration relationships between green development and green innovation, between green development and digital economy, as well as between digital economy and green innovation, and support that digital economy and green innovation can affect the green development in the long-term positively. Additionally, while digital economy positively affects the green development in the short-run, green innovation cannot affect the green development. Furthermore, while the long-run positive impact of digital economy and green innovation on green development is generally established among eastern, central, and western regions, the short-run impact of such two factors on green innovation varies among different regions, seeing as both two variables exert no significant impact on green development in western region. Empirical findings offer important policy implications for the policymakers to attach more importance on the emerging economy model such as digital economy or green innovation, which can bring about long-term green development.KEYWORDS: Green developmentdigital economygreen innovationcross-section dependencecointegrationJEL: C01C32Q40 AcknowledgementWe would like to thank Professor Chun-Ping Chang, co-editor in chief of Emerging Markets Finance and Trade, as well as all anonymous reviewers for their comments and support in our revision.Disclosure StatementNo potential conflict of interest was reported by the author(s).Notes1. Due to the results for such 4 sub-samples are similar to that of full sample, these results are not reported to save the space, but are available upon request.Additional informationFundingYing Lin thanks financial support from the National Social Science Fund of China (No. 20CGL030) and the Humanities and Social Science Fund of Ministry of Education of China (No. 19YJC790075). The work was also supported by the Humanities and Social Science Fund of Ministry of Education of China [22YJC790130] and the National Natural Science Foundation of China [72204227].