Digitalization and Green Total Factor Productivity: Evidence from Chinese Manufacturing

Abstract

Green total factor productivity (GTFP) is a central measure of high-quality green development because it captures productivity performance under resource and environmental constraints. The low-carbon transition of manufacturing therefore requires a clearer understanding of how digital transformation affects green productivity. This study examines the relationship between digital transformation and GTFP in China’s manufacturing sector and develops a structure–efficiency framework to identify the underlying channels. Combining annual report text analysis with industry-level panel data, we construct a digital transformation measure for manufacturing subsectors and estimate its causal effect with GTFP. The main findings are as follows. First, digital transformation significantly improves manufacturing GTFP, and the result remains robust after crisis period exclusion, 1% winsorization, LFRI-based alternative measurement, and System GMM tests. Second, energy structure serves as a complementary mediation channel, whereas capital structure operates as a competitive mediation channel: the negative indirect effect through capital structure partly offsets, but does not overturn, the positive direct effect of digital transformation. Third, innovation quality positively moderates the digitalization–GTFP relationship, although simple-slope estimates are statistically significant only at relatively high levels of innovation quality. Fourth, the absence of statistically significant differences across the factor-intensity and pollution-intensity groups suggests that digital transformation functions as a broadly applicable general-purpose technology rather than as a green productivity mechanism limited to specific types of manufacturing industries.