Digital economy, green innovation and high-quality economic development

Zhiang Chen and Ruikun Xing

International Review of Economics & Finance, 2025, vol. 99, issue C

Abstract: The rapid advancement of the digital economy has reshaped economic structures worldwide, yet its role in fostering high-quality economic development remains insufficiently explored. Existing research has largely overlooked the intricate mechanisms through which digital transformation contributes to sustainable economic progress, particularly the role of green innovation as a mediating factor. Addressing this gap, this study investigates how digitalization influences high-quality development by leveraging a dataset encompassing 279 Chinese prefecture-level cities from 2010 to 2022. Employing instrumental variable estimation, propensity score matching, and Heckman selection models, the findings confirm that digital economy development significantly enhances high-quality economic growth, both directly and through its stimulation of green innovation. The analysis distinguishes between substantial and strategic green innovation, revealing that substantial green innovations, characterized by breakthrough environmental technologies, exhibit a stronger mediating effect compared to incremental strategic innovations. Furthermore, heterogeneity analysis underscores regional and urban-rural disparities in digital transformation's impact, with core cities and the eastern region reaping the most benefits. These findings emphasize the need for tailored policy interventions that enhance digital infrastructure, foster innovation ecosystems, and address structural constraints limiting the equitable diffusion of digital advancements. The study provides new insights into the intersection of digitalization, sustainability, and economic quality, offering a foundation for policy strategies aimed at inclusive and environmentally sustainable development.

Keywords: Digital economy; Green innovation; High-quality development; Sustainable growth (search for similar items in EconPapers)
JEL-codes: O33 O44 Q55 Q56 R11 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056025001923
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:99:y:2025:i:c:s1059056025001923

DOI: 10.1016/j.iref.2025.104029

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().