The Impact of Digital Technology Penetration on Sustainable Household Consumption: Evidence from China’s Sinking Market

Xinghua Zhao (), Ya’e Li and Wang Zhang
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Xinghua Zhao: School of Economics and Management, Northwest University, Xi’an 710127, China
Ya’e Li: School of Economics and Management, Northwest University, Xi’an 710127, China
Wang Zhang: School of Economics and Management, Northwest University, Xi’an 710127, China

Sustainability, 2025, vol. 17, issue 22, 1-30

Abstract: Sinking markets have become a consumption blue ocean, as the digital economy enters its second phase. Based on data from 231 prefecture-level cities from 2011 to 2023, various econometric methods, including the fixed effects model, threshold effect model, and mediation effect model, are used to explore the impact and mechanism of digital technology penetration on sustainable household consumption in the sinking market. The findings suggest that the penetration of digital technology has a substantial impact on sustainability of household consumption in this market. This conclusion remains robust after addressing endogeneity and conducting a series of robustness checks. The threshold value for human capital is 0.0068, and only when human capital accumulation reaches this level can the synergy between human capital and sustainable household consumption be enhanced. The mechanism analysis indicates that the effect of digital technology on consumption is partially mediated by household income and financial development. A heterogeneity analysis reveals that the effect of digital technology penetration on sustainable household consumption is universally beneficial, with a more significant impact in central and western regions. This study provides reference ideas for enhancing the sustainability of household consumption in the sinking market in the context of digital transformation.

Keywords: digital technology penetration; sinking market; sustainable household consumption; human capital threshold; financial development (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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