Impact of digital economy on urban sustainable development: Evidence from Chinese cities

Abstract Digital economy takes data as its core input element and has high green value, but does the development of digital economy necessarily promote sustainable development? We use 286 Chinese cities from 2011 to 2019 as a case study to examine the impact of digital economy on urban sustainable development, and discuss the mechanisms of digital economy on urban sustainable development, heterogeneous impacts, threshold effects of environmental regulations, and the role of National Big Data Comprehensive Pilot Zone. It was found that: (1) The digital economy has green value and can effectively contribute to urban sustainable development. (2) The digital economy can achieve urban sustainable development by enhancing green technological innovation and human capital. (3) Environmental regulation has a threshold effect in the digital economy driving urban sustainable development. (4) The establishment of National Big Data Comprehensive Pilot Zone can promote urban sustainable development. (5) The polarization effect of the level of urban sustainable development in first‐tier and second‐tier cities is still increasing under the background of digital economy, which intensifies the “Matthew effect” among different levels of cities, and the inclusiveness of digital economy has not really been reflected in China. This study explores the influence and mechanism of digital economy on urban sustainable development in the context of China, which is of great theoretical and practical significance for developing countries to solve Solow productivity paradox and realize urban sustainable development in the new development stage.