Study on the Drivers of Inclusive Green Growth in China Based on the Digital Economy Represented by the Internet of Things (IoT)

Abstract

With the vigorous development of digital economy based on digital technologies such as Internet of things (IoT), big data, and artificial intelligence, new vitality has been injected into China's economic model. Inclusive green growth (IGG) supports the transformation of society towards a better quality of life and well-being, as well as environmental protection. Therefore, it is crucial to identify the main drivers of IGG. However, IGG is subject to a variety of interpretations and lacks definitional clarity. To brigade this gap, this study primarily evaluates the performance of IGG and explores the key drivers on IGG in China. Specifically, the data envelopment analysis (DEA) model is employed to calculate IGG for 281 cities in China during 2005-2020. Subsequently, we take advantage of a nest of machine learning (ML) algorithm to demonstrate the vital drivers of urban IGG, which avoids the defects of endogenous linear hypothesis of traditional econometric methods. The results indicate that digitization represented by the IoT and other digital technology is the core drivers of the urban IGG in the overall sample, accounting for about 50% among all of drivers. This finding provides new evidence supporting the "high-quality development" strategy in China, as well as shedding light on grasping the principal fulcrum to achieve the transformation towards IGG in developing economies similar to China.