Digital economy and low-carbon transformation of economy in China: analyzing spatial spillover effects and pathways

Digitalization is paramount for achieving low-carbon goals. Although literature has explored its implications and environmental consequences, its spatial impacts at the regional level are not entirely understood. This study uses panel data from 30 provinces in China from 2011 to 2020, to analyze the effect of the digital economy (DE) on the low-carbon transformation of economy (LCTE), considering its mechanisms, spatial spillover characteristics, and regional differences. The results show that DE positively and directly affects LCTE in a local region, and indirectly affects other relevant connected regions. The spatial effects are positive in regions that are geographically close or have human capital flow ties with the local area. Furthermore, the effect of DE differs depending on regional characteristics. Therefore, governments should accelerate DE development and strengthen the links between neighboring regions by preplanning complementary advantages to achieve LCTE.