Does digital economy policy benefit green innovation? Evidence from heavily polluting industries in China

This study investigates the impact of China’s Digital Economic Policy (DEP) on industries’ green innovation. It contributes to the existing literature on technology policy evaluation by challenging the assumption that this impact is similar across different industries. To achieve this, a conceptual framework is proposed, highlighting the asymmetric influence of the DEP on green innovation. By analysing panel data from 35 Chinese industrial subsectors, including 15 heavily polluting industries (HPIs) and 20 non-HPIs, between 2010 and 2020, this study reveals that the implementation of the DEP results in significantly higher levels of green innovation of HPIs as opposed to non-HPIs. The DEP’s positive impact on green innovation of HPIs is primarily facilitated through industrial structure upgrading. Moreover, this study finds that the DEP has a greater effect on green innovation of HPIs with a lower state-owned ratio, higher total factor productivity or higher capital dependence.