Interaction between Digital Economy and Environmental Pollution: New Evidence from a Spatial Perspective

The digital economy and the green economy are two major issues for economic recovery in the post epidemic era. From spatial interaction spillover, we analyze and measure the relationships between the digital economy and environmental pollution in 287 prefecture-level cities in China from 2008 to 2018 using simultaneous spatial equations and the generalized 3-stage least square (GS3SLS) method. The results show that: (1) there is a reverse and complex spatio-temporal evolution of the digital economy and environmental pollution in Chinese cities. (2) There is a spatial interaction spillover effect between the digital economy and environmental pollution. Local digital economy and environmental pollution inhibit each other. The digital economy and environmental pollution have a significant spatial spillover. The digital economy of surrounding regions has a suppressive effect on local environmental pollution. The environmental pollution of surrounding cities has a crowding-out effect on the local digital economy. (3) Digital economy suppresses environmental pollution through the green development effect and innovative development effect; environmental pollution suppresses the digital economy through the talent crowding out effect and the policy tightening effect. The conclusion of this paper provides evidence for the coupling and coordinated development between the digital and green economy, which is of great significance for promoting the transformation of economic development modes and realizing green and high-quality development.

Automated summary

This study analyzes the relationship between the digital economy and environmental pollution in 287 Chinese cities using spatial equations and the GS3SLS method. The results reveal a complex and reverse spatio-temporal evolution between the two, with a spatial interaction spillover effect. The digital economy suppresses environmental pollution through green and innovative development, while environmental pollution inhibits the digital economy through talent crowding out and policy tightening effects.