How does the digital economy affect industrial eco-efficiency? Empirical evidence from China

Industry is a sector with large energy consumption and pollutant emissions. Improving industrial eco-efficiency is crucial to energy conservation and pollution reduction. The digital economy has developed rapidly in recent years. However, there is a lack of research on the specific relationship between the digital economy and industrial eco-efficiency. This study measured the industrial eco-efficiency of 30 provinces in China from 2010 to 2020, through a super-efficiency slack-based measure (SBM) considering desirable outputs. By constructing a two-way fixed effect model and a panel quantile model, this study explored the effects of the digital economy on industrial eco-efficiency on a national scale. Furthermore, this study conducted grouping regression and investigated the heterogeneous impacts of the digital economy on industrial eco-efficiency. Finally, this study built a spatial Durbin model to explore the spatial effects of digital economy on industrial eco-efficiency. According to the empirical results, this study yielded the following conclusions. First, the digital economy has a significantly positive effect on industrial eco-efficiency at the national scale, with diminishing marginal returns. Second, the effects of the digital economy on industrial eco-efficiency are significantly heterogeneous on a regional scale. For eastern regions, the effects of the digital economy on industrial eco-efficiency are significantly positive, while they are negative for western regions. Third, the spillover effect of the digital economy on industrial eco-efficiency is not significant in China, indicating that there is digital isolation.