Digital economy empowerment on carbon emission reduction: an analysis of spatial spillover effects based on temporal heterogeneity

Ruixi Yuan, Congqi Wang, Tajul Ariffin Masron and Haslindar Ibrahim

Applied Economics, 2025, vol. 57, issue 35, 5359-5373

Abstract: Carbon emissions are rising as urbanization and industrialization advance. As emerging technologies are integrated and developed across various sectors of the economy and society, developing the digital economy, aligning with new development concepts, and exploring the relationship between the digital economy and carbon emissions are crucial. Thus, using the Spatial Durbin Model under dual fixed effects, this paper uses panel data from 30 Chinese provinces and cities from 2012 to 2021 to examine how the digital economy affects carbon emissions. The findings show that the digital economy has a significant spatial auto-correlation, which is rising, and there is significant development disparity across regions. The digital economy has a negative spatial spillover effect on neighbouring provinces’ carbon emissions. Thirdly, temporal heterogeneity shows that the development of the digital economy restrains carbon emissions less from 2017 to 2021 than from 2012 to 2016. This suggests that carbon emissions will be inhibited as digital economy infrastructure improves, industrial digitization increases, and scientific and technological advancement increases. Thus, regional carbon emission intensity decreases differently as the digital economy develops.

Date: 2025
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DOI: 10.1080/00036846.2024.2364924

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