The nonlinear effects of digital economy on the low-carbon green total factor productivity: Evidence from China

The production process has undergone significant changes due to the exponential expansion of digital economy, leading to implications for carbon emissions. This study aims to establish the digital economy (DE) index and measures low-carbon green total factor productivity (CTFP) in 30 Chinese provinces between 2011 and 2020. Utilizing the panel fixed-effects model and the spatial model, it examines the nonlinear effects of DE on CTFP and investigates its underlying mechanism. The results reveal the following findings: (1) CTFP has experienced a decline over the past decade, while DE has exhibited significant growth. (2) the contribution of DE to CTFP follows a U-shaped pattern, indicating that CTFP experiences a significant increase once DE reaches a specific turning point. (3) DE affects CTFP by influencing technological innovation progress. (4) The impact of DE on CTFP exhibits regional heterogeneity, with the eastern region experiencing a spatial spillover effect. These rigorous empirical findings provide valuable insights for national policymakers, emphasizing the importance of prioritizing the digital economy and technological innovation when formulating policies to facilitate sustainable economic growth and reduce carbon emissions.