Digital Economic Transformation and Green Energy Efficiency in China: Technology Diffusion and Institutional Conditions

Abstract

Against the backdrop of China’s carbon-neutrality strategies and its trade relations with economies participating in the Regional Comprehensive Economic Partnership (RCEP), the potential of digitalisation to support a less energy-intensive economy has attracted growing policy and academic attention. Existing research remains limited in two respects. First, the mechanisms through which digital economic transformation is associated with green energy efficiency remain insufficiently understood. Second, limited attention has been given to the contextual conditions that may strengthen or weaken this relationship. This study constructs a balanced panel dataset covering 31 provincial-level regions in China from 2011 to 2024 to examine the relationship between digital economic transformation and green energy efficiency. Drawing on diffusion of innovations theory, the study examines technology diffusion as a potential transmission mechanism and investigates whether trade exposure to RCEP partner economies and environmental regulation condition this relationship. The analysis employs two-way fixed-effects models, mediation and moderation analyses and system generalised method of moments (GMM) estimation. Digital economic transformation is positively associated with green energy efficiency, and its coefficient remains positive in the system GMM robustness model. The estimated indirect effect through technology diffusion is 0.028; the Sobel test yields z = 1.68 (p = .094). Thus, H2 is not supported at the conventional 5% level, although the estimate provides marginal evidence at the 10% level. Stronger environmental regulation and greater trade exposure to RCEP partner economies are associated with a stronger positive relationship between digital economic transformation and green energy efficiency. These findings suggest that the environmental benefits of digital development do not arise automatically. Policy should therefore integrate digital investment with technology diffusion, effective environmental governance and deeper regional low-carbon cooperation.