Does the Digital Economy Promote Urban Energy Transition? Evidence from China

Abstract

Although the digital economy (DE) and sustainable urban systems have drawn growing attention, how DE drives urban energy transition (UET) remains insufficiently understood. Employing panel data from 266 Chinese cities spanning 2011–2021, this study applies fixed-effects, mediation, moderation, and spatial Durbin models to examine the impact of DE on UET. UET is measured by a composite index that captures energy system performance and transition readiness. The results show that DE is positively associated with UET, with a one-unit increase in DE corresponding to a 0.1566-unit increase in UET. This finding remains robust after employing an instrumental-variable approach and a battery of robustness checks, including an exogenous policy shock. This positive effect is partially mediated by reduced resource misallocation and industrial structure upgrading. When electricity intensity is treated as a moderating factor, cities with higher electricity intensity exhibit a more pronounced positive effect of DE on UET. Further evidence indicates that DE advances UET in the eastern, central, and western regions, but has a limited impact in the northeastern region. Additionally, DE exerts positive spillover effects, thereby advancing energy transition in neighboring cities.