How does digital infrastructure construction affect low-carbon development? A multidimensional interpretation of evidence from China

Digital infrastructure construction and low-carbon development are two-wheeled engines for sustainable growth; however, the causal identification of the two is not yet well known. This paper addresses this research gap by comprehensively analyzing the relationship between them. Taking China as an example, this study empirically examined the role of digital infrastructure construction in low-carbon development using threshold, quantile, and spatial model regression. Study results disclose that (i) digital infrastructure construction actively encouraged low-carbon growth. (ii) Low-carbon development had a favorable spatial spillover impact. (iii) The threshold regression results show a non-linear trend of increasing marginal effect. (iv) In addition, industrial structure upgrading can play a reinforcing role. (v) Finally, the quantile regression results showed that digital infrastructure construction could solely provide a low-carbon boost to cities with inherently high low-carbon endowments and harm cities with lower low-carbon endowments. These findings indicate that while enjoying the "low-carbon dividend" brought by digital infrastructure construction, developing countries' governments and firms should exploit the power of industrial upgrading and regional cooperation in environmental sustainability while avoiding the negative impact of non-linear and heterogeneous endowment characteristics. Our findings offer novel strategies for digital infrastructure construction and low-carbon development in developing economies.