Level of Integration of Real and Digital Economies: Effects and Mechanisms of Environmental Pollution Impacts

Chun Fu and Wang Ouyang ()
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Chun Fu: School of Civil Engineering, Central South University, Changsha 410075, China
Wang Ouyang: School of Civil Engineering, Central South University, Changsha 410075, China

Sustainability, 2025, vol. 17, issue 9, 1-20

Abstract: As global economic development advances, the constraints of traditional growth paradigms, particularly the escalating challenge of environmental pollution, have become increasingly evident. In this context, the deep integration of the digital and real economies (IDE) has emerged as a promising approach to sustain economic expansion while addressing environmental concerns. Drawing on panel data from 30 Chinese provinces throughout 2008–2022, this study employs the entropy weight method and the coupling coordination degree model to quantify the levels of IDE and pollution. A two-way fixed-effects regression framework is then applied to assess the relationship between IDE and environmental pollution and to uncover potential mediating mechanisms. The principal findings are as follows: (1) The integration level of the digital and real economies has a suppressive effect on environmental pollution, with this effect exhibiting significant regional heterogeneity. (2) The deep IDE facilitates the optimization of the industrial structure (IS) and the reduction in energy consumption through two intermediary channels, leading to a marked improvement in environmental quality. (3) The industrial structure exhibits a threshold effect within the mechanism, with its influence on pollution levels displaying a nonlinear model characteristic of increasing marginal effect. These results enrich the interdisciplinary nexus of environmental studies and the digital economy, offering a scientific basis for policymaking and contributing to China’s dual-carbon objectives and the global sustainability transition. Future research may explore the differentiated impacts of digital convergence under diverse policy regimes and identify strategies to maximize its environmental benefits.

Keywords: digital economy; real economy; environmental pollution; entropy weight method; two-way fixed effects (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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