Does Digital Industrialization Improve Urban Energy Efficiency? Evidence from a Quasi-Natural Experiment in China

Big data-driven digital industrialization has become a critical driver of high-quality development in China, but its impacts on urban energy transition remain empirically uncertain and theoretically underexplored. This study addresses this gap using a quasi-natural experiment of China’s National Big Data Comprehensive Pilot Zones (NBDCPZ), panel data from 283 Chinese cities (2010–2023), and a combined DID-SDM (SDID) approach to estimate direct and spatial spillover effects while addressing SUTVA violations. Results show that digital industrialization reduces total urban energy consumption by 6% and improves energy efficiency, i.e. lowers unit GDP energy use. This net energy saving is achieved despite industrial output growth thanks to three key factors: industrial upgrade, green technology innovation, and reduced resource misallocation. Heterogeneity analysis reveals reductions in central China (9.8%), intra-regional pilot zones (9.0%), and large cities (7.0%), and also in non-resource-based cities and regions with advanced digital infrastructure. Crucially, there is significant spillover, where digital industrialization in one city can help neighboring cities cut energy consumption by 8.45%. This study contributes city-level causal evidence and quantitative insights, expands digital policy evaluation to energy consumption and efficiency, and integrates spatial dynamics into the digital-industrial-energy nexus. The findings offer guidance on synergizing digital transformation and low-carbon urban development.