The green side of digital trade: Evaluating the impact of National E-commerce Demonstration Cities policy

Abstract

E-commerce has emerged as a transformative force in economic development during the digital era. Amid the intensifying challenges of global climate change and environmental degradation, the role of e-commerce in addressing broader issues such as air pollution has become increasingly significant. The pursuit of sustainable development goals places higher expectations on e-commerce platforms to enhance business ecosystems and contribute to air quality governance. The establishment of National E-commerce Demonstration Cities is a key policy initiative in China aimed at encouraging the healthy and rapid development of e-commerce. This paper seeks to evaluate the air purification effects of this policy initiative. To this end, we use data from 279 cities in China spanning the years 2005–2021 and employ a multi-period Difference-in-Differences (DID) model to examine the air purification effects and underlying mechanisms of e-commerce development. The findings reveal that the National E-commerce Demonstration City policy has significantly reduced air pollution. E-commerce development contributes to air purification by facilitating industrial structure upgrading and reducing energy consumption intensity. Heterogeneity analysis indicates that the air purification effects of e-commerce are stronger in eastern and western regions of China, as well as in areas characterized by lower levels of marketization, logistics capacity, and urban consumption. Further analysis suggests that the air purification effects are more pronounced in regions with relatively moderate levels of air pollution. Finally, we provide policy recommendations and strategies for leveraging e-commerce development to effectively improve air quality in the future.