Improving Energy Efficiency Through the Digital Economy in Mainland China: Easier Said Than Done

Abstract

Enhancing energy efficiency (EE) is thought to be an essential strategy for reaching carbon neutrality objectives. The emergence of the digital economy (DE) has given EE fresh momentum. However, the relationship between the DE and EE is controversial. This research builds a fixed effect panel stochastic frontier model to examine how the DE affects EE by analyzing data from 30 provinces in China between 2011 and 2021. The study finds that the DE significantly and positively affects EE. This conclusion still holds in a series of robustness tests. Mechanism analysis finds that the DE improves EE by promoting the substitution of electricity for other energy sources. Heterogeneity analysis shows that the role of the DE in improving EE is more vital in regions with low coal proportion, low urbanization levels, and high human capital levels. This study offers new evidence for related studies and provides policy recommendations for carbon neutrality and sustainable development.