Jinjin Hu

Along with the steady worsening of environmental contamination, improving environmental governance performance (EGP) is an urgent issue that needs to be addressed. This study adopts panel data from 275 Chinese cities to examine the holistic relationship between the digital economy (DE) and urban EGP in multiple dimensions. The relationship is tested using fixed-effects models, mediated effects models, panel threshold models, and the spatial Durbin models. Results indicated that (1) the DE can effectively improve urban EGP. The findings still hold after robustness tests using instrumental variable estimation and the introduction of exogenous policy shocks. (2) The analysis of mediating effects shows that green technology innovation and industrial structure optimization are critical transmissions. (3) The panel threshold regression results indicate a nonlinear incremental phenomenon of the significant impact of the DE on urban EGP when nighttime lighting data is used as the threshold. (4) Spatial spillover analysis shows a positive spatial spillover effect of DE development on EGP in the surrounding cities. (5) Spatial heterogeneity analysis states that the enhancement effect of DE development on EGP is more significant in eastern China. Furthermore, areas located within urban agglomerations are more influenced by the DE. These findings provide a policy reference for fully exploiting the environmental enhancement effects of the DE.