How does the digital economy impact the green upgrading of manufacturing? Perspectives on technological innovation and resource allocation

Chenchen Wang, Yaobin Liu, Yongkun Wan, Sheng Hu and Haibo Xia

Applied Economics, 2025, vol. 57, issue 34, 5049-5064

Abstract: This study aims to examine the impact and driving mechanisms of the digital economy (DGE) on the green upgrade of manufacturing (MGU) within the context of low-carbon development. This study focuses on China as the research sample, using panel data from 2011 to 2019, covering both provincial and industry levels. It is tested through econometric empirical methods such as panel fixed effects, and mediation effects. The results demonstrate that the DGE plays a crucial part in driving the MGU, principally by improving resource allocation efficiency and advancing technological innovation. Relative to manufacturing efficiency improvements, DGE more substantially promotes MGU towards green and environmentally friendly development. Further heterogeneity analysis reveals that the effect of manufacturing upgrades is more pronounced in China’s eastern regions and areas with higher levels of socio-economic development and greater market potential. Building upon these findings, the paper offers a suite of policy recommendations including the judicious advancement of digital transformation and technological innovation, optimizing resource allocation and achieving lean production, and implementing region-specific green digital management. It is expected to provide experience for China and the world to learn from in addressing climate change and promoting green transformation in the development mode.

Date: 2025
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DOI: 10.1080/00036846.2024.2364112

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