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Jian, W.; Huang, W.; Yamaka, W.; Liu, J. Internet Development and Green Total Factor Productivity. Encyclopedia. Available online: https://encyclopedia.pub/entry/48755 (accessed on 04 July 2024).
Jian W, Huang W, Yamaka W, Liu J. Internet Development and Green Total Factor Productivity. Encyclopedia. Available at: https://encyclopedia.pub/entry/48755. Accessed July 04, 2024.
Jian, Wang, Wenjuan Huang, Woraphon Yamaka, Jianxu Liu. "Internet Development and Green Total Factor Productivity" Encyclopedia, https://encyclopedia.pub/entry/48755 (accessed July 04, 2024).
Jian, W., Huang, W., Yamaka, W., & Liu, J. (2023, September 02). Internet Development and Green Total Factor Productivity. In Encyclopedia. https://encyclopedia.pub/entry/48755
Jian, Wang, et al. "Internet Development and Green Total Factor Productivity." Encyclopedia. Web. 02 September, 2023.
Internet Development and Green Total Factor Productivity
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This entry is adapted from the peer-reviewed paper 10.3390/su151612438

The strategy of sustainable development is not only a long-term plan for the survival and development of the Chinese nation, but also an inevitable requirement for the coordinated economic and social development of all countries in the world. With the rapid development of new-generation information technology, the Internet may play an even more important role in the implementation of sustainable development strategies. 

internet development green total factor productivity industrial structure upgrading

1. Introduction

As China’s economy enters a new normal, China is beginning a new stage of development, and economic development is starting to shift from a stage of high-speed growth to a stage of high-quality development. The 2021 Party’s 20th Congress report emphasizes that high-quality development is the primary task of building a modern socialist country in all aspects. Green total factor productivity (GTFP) is measured by combining the indicators related to energy consumption and environmental pollution with the traditional total factor productivity accounting, which can measure regional economic development more comprehensively and accurately. It is also consistent with the concept of green development under the new development stage [1]. Green total factor productivity (GTFP) fully considers environmental protection and economic development, and it is an important and comprehensive indicator that reflects a country’s sustainable development capability [2]. Therefore, how to improve green total factor productivity has become the focus of attention of scholars and governments from all walks of life.
The “13th Five-Year Plan” puts forward the concept of “Internet+” industry, and China’s internet has been vigorously developed. The internet industry has become a key industry under the “13th Five-Year Plan”. Compared with the previous five-year plan, references to internet industry mentioned in the “14th Five-Year Plan” were scaled down. However, the development priorities of the “14th Five-Year Plan”, such as the digital economy, cloud computing and other emerging technologies, are still based on the Internet. According to the “50th Statistical Report on China’s Internet Development”, released in 2022, by June 2022, the number of China’s internet users reached 1.051 billion, with an internet penetration rate of 74.4%. The report shows that internet basic resources, as well as information infrastructure construction, have been further strengthened. Additionally, the quantity of internet users has been further increased and internet applications are also in continuous development. With the rapid development of cloud computing, big data, mobile internet and other next-generation network information technologies, the development of the Internet will play a greater role in promoting sustainable economic development [3]. The embedding of the Internet in the zeitgeist has brought new opportunities for green total factor productivity enhancement. Compared with traditional technologies, the Internet has unique characteristics of rapidity, comprehensiveness, and penetration in information dissemination. These can be used to organize the optimal allocation and reorganization of production factors in the region [4] . On the other hand, the Internet can lower transaction costs, reduce intermediate links and speed up transactions. Thus, it promotes increased productivity in manufacturing, upgraded consumption, and accelerated export trade and business model innovation [5]. In addition, the use of digital technologies such as the Internet may amplify the effects of traditional technologies [6].

2. Internet Development

The studies on the Internet in the literature have focused on industrial structure upgrading, regional innovation capacity and economic growth. Yu et al. selected data from listed companies from 2011 to 2021 as a research sample and explored the impact of industrial internet platforms on the green innovation performance of enterprises [7]. The results of the study showed that the industrial internet platform significantly improves the green innovation performance of enterprises. Liu et al. studied the impact of internet development on the level of green innovation and the mechanisms of impact [8]. They found that the development of the Internet mainly promotes the regional level of green innovation by reducing the cost of transactions, improving the ability of technology research and development, and strengthening the level of external hyper-views; subsequently, Zhang et al. used the double-difference model (DID) and propensity score matching method (PSM) to study the impact of internet use on enterprise innovation [9]. They found that internet use can significantly improve the innovation level of China’s manufacturing exporters. Pisano et al. argue that mobile internet technologies enhance personalization and precision in traditional service industries [10]; Liou et al. found that internet development can promote the transformation and upgrading of industrial structures. Koutroumpis et al. used data from 15 EU countries from 2003 to 2006 in their research and found that the Internet can significantly promote economic growth [11]; Li et al. found that internet development can significantly promote regional economic growth.

3. Total Factor Productivity

In the context of the new development stage, the question of how to promote green total factor productivity growth is the focus of scholars and governments. In recent years a large number of scholars have studied the impact of hot issues such as digital economy, digital finance, human capital, and government policies on total factor productivity.
Digital economy: Yang et al. showed that the digital economy affects total factor productivity through two channels: human capital investment and industrial structure upgrading. In addition, there is also a spatial spillover effect of the development of the digital economy that helps to improve total factor productivity in neighboring regions [12]. Guo et al. found that the digital economy can promote high-quality economic development through two major mechanisms: improving human capital and promoting green technological innovation [13]. Pan found that there is a positive nonlinear effect of the digital economy and upgrading total factor productivity. This suggests that the digital economy is an innovative driver of total factor productivity enhancement and sustainable development [14].
Digital inclusive finance: Digital inclusive finance, as a major part of the digital economy, has also been studied by many scholars for its impact on GTFP. Yu et al. studied the impact of digital finance on GTFP and its mechanism of action from a dynamic perspective. The results show that digital finance can promote GTFP through the effects of technological innovation and upgrading the industrial structure [15]. Xiao et al. used interprovincial panel data from 2011–2019 and found that digital financial inclusion significantly contributed to the increase in total factor productivity in agriculture [16]; however, the opposite conclusion was also reached by other studies. Chen et al. used data of listed companies from 2011–2020 and the digital financial index to investigate the impact of digital financial inclusion on total factor productivity. They found that digital financial inclusion does not contribute significantly to the total factor productivity of listed companies [17].
Human capital: Li et al. found that human capital significantly contributes to GTFP and that high levels of human capital contribute more to GTFP than low and medium levels of human capital [18]. Benhabib and Spiegel found that total factor productivity depends on human capital accumulation [19]. Yao et al. found that the increase in innovative human capital significantly contributes to green TFP, and that the effect on green TFP tends to have a decreasing marginal effect [20].
Government policies: Working from the perspective of the innovation model selection effect of environmental policies, Zhang et al. analyzed the reasons for the slowdown of GTFP growth in China. The results showed that there is heterogeneity in the different incentive effects of environmental policies on innovation and thus on GTFP. Liu et al. investigated the relationship between policy adjustments in SO2 emission charges and urban GTFP growth. They found that increasing SO2 emission charges can reduce emissions and promote GTFP [21]. Guo et al. used a DID model to investigate the impact of energy consumption right trading policies on the efficiency of urban green development. The results showed that energy consumption right trading policies contribute significantly to the efficiency of urban green development [22].

4. Internet Development and Total Factor Productivity

The Internet, as an important component of the digital economy, is the driving force behind the development of the digital economy and has an important impact on China’s high-quality economic development. The available literature on the research results of the Internet’s impact on total factor productivity can be divided into three themes. First, whether internet development can promote GTFP growth. Drawing on data from 30 Chinese provinces from 2006–2018, Wang et al. empirically investigated the impact of the digital economy and energy internet on green economic growth using the spatial dynamic Durbin model. The study found that the energy internet and digital economy can significantly promote total factor productivity, and that their interaction term has a positive impact on total factor productivity [23]. Li et al. used China’s interprovincial panel data from 2009–2017 and found, among other things, that internet development has a positive effect on GTFP. In addition, there is a double threshold effect of human capital [24]. Secondly, the impact of internet development on total factor productivity is studied from different dimensions based on the total factor productivity decomposition perspective. Based on China’s interprovincial panel data from 2002 to 2014, Guo et al. found that the Internet can significantly promote technological progress but has a suppressive effect on China’s technical efficiency [25]. However, some scholars have reached the opposite conclusion. Based on the decomposition of GTFP, Liu et al. found that the development of the Internet promotes green technological efficiency but inhibits green technological progress, and in general has a promoting effect on GTFP [26]. Third, the mechanism of the impact of internet development on GTFP and the spillover effects are studied. Fang et al. found a positive effect of internet development and entrepreneurship on total factor productivity. Furthermore, there is a significant spatial spillover effect between internet development, entrepreneurship and GTFP [27]. Using interprovincial panel data in China from 2006–2017, Wu et al. found that internet development can promote total factor productivity by alleviating resource mismatch, promoting industrial structure upgrading, and enhancing regional innovation capacity [28].
In studying the relationship between internet development and GTFP, some scholars have used the spatial Durbin model to study the spatial spillover effect. This can be used to analyze the impact of internet development on GTFP in neighboring regions. Some other scholars have used the interaction term to study the impact of the interaction between internet development and other variables on GTFP; in addition, there are also scholars who have used the moderating effect model to study the impact of the Internet on GTFP. The moderating effects model can analyze whether the impact of internet development on GTFP is affected by other factors. However, none of the above models can analyze the mechanism of the impact of internet development on GTFP and the characteristics of nonlinear impact. In order to analyze the transmission mechanism, it is necessary to use the mediation effects model. Currently, the mediation effect test includes the traditional three-step method, bootstrap test and Sobel test.
Overall, the existing literature provides a theoretical basis for studying the relationship between internet development and GTFP, but there are still some shortcomings that need to be improved. First, scholars have conducted fewer studies on the effects of the promotion of the Internet on GTFP. Most scholars focus on the digital economy and do little research on the internet. Second, existing research focuses on the spatial spillover effect of internet development on GTFP, and less on the impact of internet development on GTFP. In addition, there is a lack of research on the threshold effect of the mechanism of influence. Testing the threshold effect of the influencing mechanism would be useful in illustrating that regions should pay attention to phasing when increasing GTFP. Third, the existing literature lacks research on the relationship between internet development, human capital structure and GTFP. Only a few scholars have included human capital in their analysis, but they also use years of education per capita as a measure, which cannot measure the quality of human capital. 

References

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  3. Yongyi Cheng; Tianyuan Shao; Huilin Lai; Manhong Shen; Yi Li; Total-Factor Eco-Efficiency and Its Influencing Factors in the Yangtze River Delta Urban Agglomeration, China. Int. J. Environ. Res. Public Heal. 2019, 16, 3814.
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