Can digital transformation improve urban energy efficiency: Evidence from China

As digitalization continues to transform the functioning of urban energy systems, its role in enhancing urban energy efficiency ( UEE ) at the city scale has not yet been fully clarified. Using panel data for 282 Chinese cities over the period 2014–2023, this paper investigates the effect of digital transformation on UEE . To mitigate potential endogeneity concerns, the analysis combines instrumental-variable estimation, a difference-in-differences strategy based on policy shocks, sensitivity tests, and a series of robustness checks. The empirical results show that digital transformation exerts a significant positive influence on UEE , with stronger effects observed in eastern coastal areas and old industrial-base cities. Mechanism analysis reveals that this effect operates mainly through three pathways: stimulating green innovation, promoting industrial upgrading, and improving human capital accumulation. In addition, the results indicate that green finance reinforces the contribution of digital transformation to UEE by easing financing constraints. These results deepen the city-level understanding of the digital–green nexus and provide relevant guidance for fostering a sustainable and low-carbon urban energy transition.