Investigating the spatial spillover impact of digital economy with research and development investment on environmental sustainability
Authors: Peng Li , Anthony Maria Das Paul 
Published: December 2024

PurposeChina is experiencing an economic revolution focused on reducing carbon emissions (CEs). Various technological research and development (R&D) frameworks also hasten the growth of the digital economy, which then fuels this economic revolution. Nevertheless, several correlation uncertainties in China have been observed between R&D investment and CE reduction with green economic transformation. This phenomenon is attributed to insufficient spatial impact considerations.Design/methodology/approachTherefore, this article explored the spatial impacts of the digital economy and R&D expenditures regarding environmental quality using Chinese-related panel data between 2012 and 2021. This study uses the Moran I index to test whether there is a spatial relevance between regional carbon emissions in China and assess the digital economic advancement level using the entropy weight approach. In addition, this article analyzes the direct and indirect impacts following the partial differentiation approach, and then creates an interaction term between the digital economy and R&D investment to assess the moderating effect for examining the influence of investing in R&D on reducing CO2 levels of the digital economy.FindingsA positive spatial relevance between the digital economy and CEs was then highlighted from the empirical findings. The digital economy expansion also demonstrated higher local CEs while negatively impacting nearby regions. Notably, the digital economy concurrently lowered and increased local CEs in the Eastern and Central zones, respectively. Overall, a larger R&D investment directly impacted the capacity of the digital economy in decreasing the carbon emission intensity (CEI) at a regional level. An accelerated digital economy expansion and lower CEI were recorded in the Eastern zone owing to more significant R&D investments.Research limitations/implicationsChina has gradually shifted its focus from reducing CEs to implementing “dual control of carbon” to achieve the “dual carbon” target. Future studies should then involve additional studies concerning the impact mechanism and path selection related to “dual carbon control.”Practical implicationsInvestment in R&D plays a key role in reducing carbon emissions from the digital economy. By fostering innovation and technological advances, R&D investment activities can create more energy-efficient digital infrastructures, develop sustainable practices and optimize resource use. In addition, these R&D investments can facilitate the transition to renewable energy sources, enhance data management systems to minimize waste and promote the adoption of green technologies by businesses and consumers. As the digital economy continues to evolve, prioritizing R&D in this area is critical to achieving long-term sustainable development goals and addressing the pressing challenges of climate change. Stakeholders across industries must therefore recognize the importance of investment in research and development as a strategic approach that not only drives economic growth but also ensures environmental stewardship in an increasingly digital world.Social implicationsInvestments in research and development not only foster innovation and technological progress, but also promote sustainable practices, which can have significant environmental benefits. In addition, they have the potential to create new jobs, improve public health through better air quality and drive economic growth in a manner consistent with climate goals. As society becomes increasingly dependent on digital solutions, it is critical to harness the power of the digital economy to achieve a more sustainable and inclusive society.Originality/valueResearch development investment is critical to all aspects of regulation. Research on R&D investment can provide direction to local governments in formulating digital economy policies and can be beneficial to local governments in considering regional differences in resource availability. The research and technical innovation strategies in the policies for developing the digital economy can substantially expedite carbon neutrality achievement by 2060.