Can digital economy development improve total factor energy efficiency? Evidence from China

While digital transformation enhances energy efficiency through transaction cost reduction, resource optimization, and information dissemination, it simultaneously raises concerns regarding potential rebound effects in energy consumption. Such paradoxical dynamics underscore the necessity for rigorous examination of underlying mechanisms to harness the digital economy’s environmental potential and inform sustainable development policies. This study establishes an integrated “mechanism-heterogeneity” analytical framework using panel data from 30 Chinese provinces (2011–2023). We employed Entropy Weight Method (EWM) and Slacks-Based Measure Data Envelopment Analysis Model (SBM-DEA) to quantify digital economy development and total-factor energy efficiency (TFEE), respectively. This study further combined fixed-effects models, mediation analysis, and regional comparative studies to elucidate causal mechanisms and spatial variations. Key findings indicate: (1) Digital economy development significantly enhances TFEE, with particularly strong effects in western China; (2) The impact manifests through both direct channels (digital infrastructure deployment and factor allocation optimization) and indirect pathways (technology innovation and industrial restructuring); (3) Mediating effects exhibit distinct regional patterns, technology-driven in eastern provinces, industrial upgrading-focused in central regions, and rationalization-oriented in western areas. These insights inform a multi-tiered policy framework addressing digital governance institutions, technology incentives, and region-specific implementation strategies, offering empirically grounded approaches for aligning technological progress with ecological modernization goals.