Digital Dividends Across Space: How the Digital Economy Fuels Green Innovation

ABSTRACT To investigate whether digital economy shape the spatial dynamics of regional green innovation, this paper utilises data from Chinese prefecture‐level cities and constructs multidimensional spatial weight matrices. The results show that the development of the digital economy significantly generates strong spatial spillover effects on green innovation. These findings remain robust to policy shocks in a quasi‐natural experiment, supporting their causal reliability. Mechanism analyses reveal that the digital economy primarily exerts a positive impact on green innovation by advancing industrial structure upgrading and facilitating interregional collaborative innovation among firms. Furthermore, heterogeneity analyses show a clear gradient pattern, characterised by stronger effects in the eastern region and progressively weaker effects in the other regions. Overall, this study systematically uncovers the structural pathways and spatially uneven characteristics through which the digital economy enhance green innovation and provides a scientific basis for formulating differentiated regional policies.