Local environmental constraints and city's position in dual value chain: What role does digital technology play?

Local environmental constraints are capable of regulating market and affecting dual value chain (DVC), digital technology, such as information technology, big data, Internet of Things, cloud computing, blockchain and artificial intelligence, can optimize the policy effectiveness. Based on a dataset of 278 Chinese cities during 2011–2019, this article explores the non-linear effects of local environmental constraints on city's position in DVC, and then captures the role of digital technology in this process. Results confirm an inverted U-shaped effect of direct environmental constraint on DVC, while indirect environmental constraint shows positive U-shaped curve and needs more than 0.2864 to generate promotion effect. Besides, carbon control policies significantly increase the promotion effect of indirect environmental constraint on DVC. Digital technology in interval [8.6972, 9.8902] can most effectively amplify the policy effectiveness of local environmental constraints, which makes a gentler inverted U-shaped curve of direct environmental constraint, and reverses the indirect environmental constraint to an inverted U-shaped effect. This article provides new perspectives for a balanced development between local environmental constraints and DVC in the digital era.