Can internet development improve carbon emission efficiency for manufacturing? The role of market integration.

ABSTRACT

Improving carbon emission efficiency of manufacturing is important for promoting low-carbon development and achieving harmonious coexistence between humans and nature. In this study, we use the Global-MinDS model to measure the carbon emission efficiency of China's provincial manufacturing from 2011 to 2020. To do so, we construct a mathematical model to analyze the mechanism of the interaction among internet development, market integration, and carbon emission efficiency of manufacturing. Then, we empirically examine the carbon emission reduction effect of internet development using the Bartik instrument variable method and verify the significance of market integration. Our results show that internet development can significantly improve the carbon emission efficiency of manufacturing, promoting manufacturing low-carbon transformation. Carbon emission reduction effect of internet development is characterized by heterogeneity in market integration, environmental regulation, and policy intensity. This means that the impact of internet development is more pronounced in lower integration regions, higher environmental regulation intensity and in big data comprehensive experimental zone. Intermediate mechanism tests show that internet development can promote market integration by reducing external transaction costs, so as to play a carbon emission reduction effect in the market mechanism. Our study provides empirical evidence for the carbon emission reduction effect of the digital economy and offers valuable references for effectively promoting the low-carbon transformation of manufacturing in China from the perspective of unified market.