The Nonlinear and Spatial Effects of Digital Economy on Regional Green Development Efficiency: Empirical Evidence From 30 Provinces in China

Abstract

Digital economy (DE), driven by digital technology, enhances digitalisation, networking and intelligence of the economy and society by integrating it with the real economy. Based on network effects theory, this study examines how DE empowers regional green development efficiency (GDE) and explores its mediating role in addressing the contradiction between environmental protection and economic development. Using data from 30 provinces in China from 2008 to 2021, this study empirically examines the impact of DE on regional GDE from multiple perspectives. This study finds that (1) DE directly promotes the regional GDE and produces positive spatial spillover effects. All four dimensions of the DE can enhance the regional GDE. The driving effect size is in the order of digital technology (DT) > digital foundation (DF) > digital platform (DP) > digital inclusive finance (DIF); (2) A ‘U’-shaped relationship exists between the DE and regional GDE, initially inhibiting efficiency but actively promoting it once a threshold of approximately 51% is exceeded; (3) The mechanism test shows that the DE effectively improves regional GDE by advancing regional green technology; and (4) The test based on regional heterogeneity shows that the impact of the DE on regional GDE differs significantly based on regional income disparities. These results provide strong theoretical support for DE in sustainably empowering regional green development in China. To enhance DE's impact on GDE, the central government should promote spatial policy interconnection, while local governments tailor strategies to their development needs for effective structural and efficiency transformation.