DIGITAL ECONOMY AND GREEN TOTAL FACTOR PRODUCTIVITY: THE MEDIATING ROLE OF GREEN TECHNOLOGICAL INNOVATION IN CHINESE CITIES

Abstract

The paper examines China’s progress toward high-quality development, where Green Total Factor Productivity (GTFP) serves as a key measure of economic–environmental coordination. Using panel data from 285 prefecture-level and above cities from 2011 to 2020, it applies the SBM-GML model to measure GTFP and employs two-way fixed effects and mediation models to assess how the digital economy influences urban GTFP and the mediating role of green technological innovation. The results show that: (1) the digital economy significantly improves urban GTFP, and this remains robust after regional fixed effects and multiple tests; (2) green technological innovation partially mediates the digital economy–GTFP relationship, indicating that digitalisation supports green growth through technological progress; and (3) the mediating effect differs across regions. The findings provide theoretical and policy insights for integrating digital economy development with green transformation strategies.