The synergistic effect of digital economy and manufacturing structure upgrading on carbon emissions reduction: Evidence from China

Abstract

Promoting the integration of the digital economy with the manufacturing-based real economy is beneficial to avoid the detachment of economic development from tangible industries. Whether the low-carbon transformation can be achieved in this integration process is also an important issue. So, taking China for instance, we theoretically analyze the impact mechanism of the integration of the digital economy with three major categories of manufacturing (labor-intensive, capital-intensive, and technology-intensive) on carbon emissions, and empirically test those effects based on 30 provinces in China from 2011 to 2019. The following conclusions are drawn: (1) The development of the digital economy can reduce carbon emissions. (2) The integration of the digital economy with different categories within the manufacturing industry causes different effects on carbon emissions reduction, shown as a structural upgrading type of carbon emissions reduction, i.e., the deeper integration between digital economy and technology-intensive manufacturing contributes to a multiplier effect in carbon emissions reduction. (3) The efficiency improvements benefited from the integration with the digital economy in technology-intensive manufacturing are the main reason for the structural upgrading type of carbon emissions reduction. Therefore, policy should aim at accelerating the integration of the digital economy with advanced manufacturing to realize comprehensive low-carbon transformation.

Keywords: Carbon emissions reduction; Digital economy; Manufacturing structure upgrading; System GMM.