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Arid Land Geography ›› 2026, Vol. 49 ›› Issue (9): 1977-1994.doi: 10.12118/j.issn.1000-6060.2025.557

• Regional Development • Previous Articles    

How does the digital economy enhance total factor carbon efficiency: A study from the perspective of market distortions

YANG Qing1(), ZHANG Jinru1, HAO Jiayi1, ZOU Shaohui1(), ZHANG Lei2   

  1. 1 School of Management, Xi’an University of Science and Technology, Xi’an 710054, Shaanxi, China
    2 School of Economics and Management, China University of Mining and Technology, Xuzhou 221116, Jiangsu, China
  • Received:2025-09-12 Revised:2025-11-02 Online:2026-09-25 Published:2026-09-07
  • Contact: ZOU Shaohui E-mail:004907@xust.edu.cn;zoushaohui@163.com

Abstract:

This study analyzes the mechanism through which the digital economy enhances total factor carbon efficiency from the perspective of market distortions, constructing causal mediation, dynamic spatial panel Durbin, threshold effect, and a quantile regression models using panel data from 282 prefecture-level cities in China from 2011 to 2021. Five relevant results emerge. (1) The digital economy significantly enhances carbon efficiency, and this conclusion remains robust following incomplete exogeneity instrumental variable tests, difference-in-differences estimation endogeneity tests, and multiple robustness tests. (2) Mechanism analysis validates reduced distortions in the product market as a primary pathway through which the digital economy enhances carbon efficiency. Subsequent sensitivity analysis confirms the robustness of this mediating effect. (3) Regarding the spatial spillover effects of the transmission mechanism, the digital economy significantly enhances total factor carbon efficiency in neighboring cities and alleviates product market distortions in these regions. (4) Concerning the heterogeneity of transmission mechanisms, the digital economy’s impact on improving carbon efficiency becomes more pronounced as a region’s carbon efficiency increases. Furthermore, as the degree of product market distortion rises, the digital economy’s effect on mitigating this distortion follows an inverted U-shaped pattern, initially intensifying before gradually weakening. (5) The digital economy’s impact on carbon efficiency exhibits an N-shaped double-threshold effect of first enhancing, then inhibiting, and subsequently promoting efficiency. This comprehensive mechanism analysis provides a novel perspective for systematically understanding the digital economy’s influence on enhancing carbon efficiency and reveals valuable pathways and policy insights for advancing carbon peak and neutrality goals.

Key words: digital economy, total factor carbon efficiency, market distortions, spillover effect, causal mediation effect, difference-in-differences model