Work

Digital transformation as environmental implementation capacity: resource-efficiency associations, spatial spillovers, and threshold evidence from Vietnam

Year: 2026

Type: article

Abstract: Emerging economies must improve resource efficiency while managing energy demand, emissions pressure, industrial upgrading, and uneven subnational governance capacity. This study examines provincial digital transformation as environmental implementation capacity - the ability to mobilize information, coordination, adoption, and innovation for environmental management - rather than treating digitalization as inherently green. Using a balanced baseline panel of 63 Vietnamese provinces over 2010-2023 (882 province-year observations), we construct a five-dimensional Digital Transformation Indicator (DTI) and estimate two-way fixed-effects models, Spatial Durbin Models, an innovation-capacity pathway model, and Hansen threshold regressions. Provincial final energy use is harmonized from sectoral activity data and national energy balances; Green Total Factor Productivity and exclusion of high-imputation provinces provide sensitivity checks. In the preferred controlled fixed-effects model, DTI is positively associated with energy efficiency ( β = 0.334, p < 0.01). Spatial decomposition attributes 37.5% of the total association to cross-provincial spillovers. The bootstrapped innovation-capacity pathway estimate is 0.144 (95% CI [0.089, 0.212]), consistent with a material but noncausal innovation-capacity pathway. A threshold at DTI = 0.487, near the 60th percentile, separates a lower-slope regime (0.187) from a higher-slope regime (0.412). Results remain qualitatively stable across alternative DTI constructions, spatial matrices, outcomes, a reduced-sample two-period DTI lag, and endogeneity-oriented robustness checks. The findings support a conditional, noncausal interpretation of digital capability as an environmental implementation resource.

Source: Environmental Challenges

DOI: 10.1016/j.envc.2026.101645