Digital economy and environmental pollution in the manufacturing sector: Emission reduction effects and mechanisms

Digital empowerment in the manufacturing industry serves as a pivotal strategy for China to mitigate pollutant emissions and achieve sustainable production. Utilizing industry panel data from 2001 to 2014, this study employs a two-way fixed effect model and a mediation effect model to empirically examine the impact of the digital economy on reducing emissions in China's manufacturing sector. It investigates the underlying mechanisms, providing novel evidence at the industry level for the relationship between the digital economy and environmental pollution reduction. The findings reveal that: (1) Enhancing digital investment significantly curtails pollution emissions in China's manufacturing industry, with variations in effectiveness depending on the knowledge intensity of specific subsectors. (2) Technological innovation and the rationalization of industrial structure are critical mechanisms by which the digital economy facilitates emission reductions in the manufacturing sector.