The Collision of digital and green: Digital transformation and green economic efficiency

Enhancing the green economy efficiency (GEE) is crucial for building a sustainable economy. How can the rapidly advancing digital transformation contribute to this process? The paper empirically examines the direct and spatial spillover effects of digital transformation on cities' GEE in China. This study utilizes the National Ecommerce Pilot City (NEPC) policy as a quasi-natural experiment of regional digital transformation and employs the staggered difference-in-differences (DID) method with heterogeneous effects. The findings reveal that (i) implementing the NEPC policy significantly increases urban GEE by 2.6%, corresponding to a 16% increase in the mean of GEE. This effect is particularly pronounced in non-resource-based cities and cities with high Internet penetration. (ii) The mechanism test shows that the pilot policy positively affects GEE by promoting green structural transformation, enhancing green innovation, and strengthening public environmental concerns. (iii) The study highlights a positive spatial spillover effect of the NEPC policy on the GEE of nonpilot cities. (iv) The adoption of the NEPC plays a pivotal role in advancing energy use and carbon emission efficiency. This paper expands the existing knowledge on the green development effects of the digital economy while offering valuable policy insights for building an "Inclusive Green Economy".