Promoting sustainable development: Revisiting digital economy agglomeration and inclusive green growth through two-tier stochastic frontier model

Abstract

In the global wave of digitization, digital economic agglomeration, as an emerging model, profoundly impacts the economy, environment, and society. Countries worldwide are formulating strategies and policies to promote the development of digital economic agglomeration, yet they also face challenges of widening digital divide and environmental sustainability. Existing research primarily focuses on the positive effects of the digital economy, with limited assessment of the dual effects of digital economic agglomeration on sustainable development. This study utilizes panel data from 282 Chinese cities between 2011 and 2021, employing a two-tier stochastic frontier model. It reexamines the dual impacts and intrinsic mechanisms of digital economic agglomeration, attempting to capture regional and temporal variations in the dual effects to address this research gap. The study shows that: (1) The positive effect of digital economy agglomeration is much more than the negative effect, resulting in a positive net effect that shows an overall increasing trend with significant regional disparities. (2) Digital economic agglomeration has a significant negative spatial spillover effect, promoting local inclusive green growth while inhibiting inclusive green growth in neighboring cities. (3) Regarding the mediating mechanisms, industrial structure, technological innovation and resource allocation efficiency have positive indirect effects on inclusive green growth, while environmental regulation intensity has a negative indirect effect, and it has a nonlinear effect under the threshold constraint of the mediating mechanisms. This study provides policy insights for promoting inclusive green growth, emphasizing the need to consider regional differences in resource distribution, ecological environment, and social demands. It advocates for the organic integration of the digital economy across different regions, reducing polarization effects, and enhancing diffusion effects.

Keywords: Digital economy agglomeration; Inclusive green growth; Mechanism analysis; Panel threshold effect; Spatial spillover effect; Two-tier stochastic frontier model.