Cloud Computing and Green Total Factor Productivity in Urban China: Evidence from a Spatial Difference-in-Differences Approach

Liangjun Yi, Wei Zhang and Yiling Ding ()
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Liangjun Yi: School of Economics, Xiamen University, Xiamen 361005, China
Wei Zhang: Institute of Western China Economic Research, Southwestern University of Finance and Economics, Chengdu 611130, China
Yiling Ding: Logistics and Management Engineering College, Yunnan University of Finance and Economics, Kunming 650221, China

Sustainability, 2025, vol. 17, issue 21, 1-38

Abstract: The rapid development of new-generation information technologies, such as cloud computing, artificial intelligence, big data, and blockchain, is profoundly reshaping production and lifestyles, with regional development patterns. This study employs text analysis to extract the policy adoption timeline of cloud computing from official documents and constructs a quasi-natural experiment framework. First, spatial autocorrelation and hotspot analysis reveal significant spatial dependence in the urban green total factor productivity (GTFP). Accordingly, using panel data of 284 Chinese cities from 2000 to 2023, we apply a spatial difference-in-differences (SDID) model to empirically examine the impact of cloud computing on the urban GTFP. The results show that, first, the adoption of cloud computing significantly enhances the local GTFP, but simultaneously suppresses neighboring cities’ GTFP through the siphon effect, thereby generating negative spatial spillover effects. These findings remain robust across parallel trend tests, placebo tests, and multiple robustness tests. Second, mechanism analysis indicates that improved resource allocation efficiency and strengthened green innovation are the two core channels through which cloud computing promotes GTFP. Third, heterogeneity analysis reveals that cloud computing exhibits stronger siphon effects in smaller cities, generates significant positive spatial spillover effects in coastal regions, and effectively fosters GTFP growth within urban agglomerations, while exerting limited influence on non-agglomerated areas. Moreover, industrial agglomeration further amplifies the positive impact of cloud computing on GTFP. Additionally, from the perspective of regional policies, this study finds that promoting the integrated development of urban agglomerations, reducing administrative monopoly, facilitating free factor mobility, and advancing urban international economic activities are effective pathways to mitigate the siphon effect of cloud computing on the urban GTFP. Based on these findings, this study offers targeted policy recommendations to leverage cloud computing for advancing green and high-quality urban development.

Keywords: green total factor productivity; cloud computing; spatial difference-in-differences approach; resource allocation; green innovation (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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