Digital Economy Development, Environmental Regulation, and Green Technology Innovation in Manufacturing

Ku Liang () and Yujie Hu ()
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Ku Liang: School of Business Administration, Northeastern University, Shenyang 110001, China
Yujie Hu: Institute of Agricultural Economics and Development, Chinese Academy of Agricultural Sciences (CAAS), Beijing 100081, China

Sustainability, 2025, vol. 17, issue 17, 1-31

Abstract: The development of the digital economy has become a significant driving force for the innovation of green technology in the manufacturing sectors. Green technology innovation in the manufacturing sectors is not only a key engine for realizing economic green transformation and achieving the goal of achieving peak carbon emissions by 2030 and carbon neutrality by 2060, but also an important path for cultivating new quality productivity. Based on Schumpeter’s endogenous growth theory, in this study, we constructed an analytical model with a unified framework of digital economic development and environmental regulation, systematically explored the mechanism of digital economic development with respect to green technological innovation in the manufacturing sectors and the moderating effect of environmental regulation, and carried out empirical research based on panel data at the provincial level and the level of the subdivided manufacturing sectors in China. We found that the development of the digital economy promotes green technology innovation in the manufacturing industry. However, according to the theory of increasing marginal information costs, it shows a significant nonlinear relationship. Absorptive capacity is the key means of support that manufacturing enterprises can leverage to improve their level of green technological innovation. Environmental regulation plays a crucial role in guiding green technological innovation in the manufacturing sectors. A further heterogeneity analysis showed that the development of the digital economy exerts a stronger positive impact on green technological innovation in cleaner-production-oriented manufacturing sectors and those located in regions with more advanced financial regions and in technology-intensive industries. This study provides theoretical support for understanding the driving mechanisms of green technological innovation in the manufacturing sector against the backdrop of the digital economy, offering practical implications for optimizing environmental regulation policies and enhancing the level of green development in manufacturing.

Keywords: digital economy development; green technology innovation in manufacturing; absorptive capacity; environmental regulation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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