The impact of internet development on carbon productivity: New evidence from China's service sector

The service sector is facing the dual challenge of persistent inefficiency and increasingly prominent issues with carbon emissions globally. These challenges are particularly pronounced in China, the world's largest developing economy. In this context, it is imperative for countries worldwide, especially China, to enhance the carbon productivity of the service sector, and the impacts of internet development cannot be ignored. This paper examines how internet development affects service sector carbon productivity. Provincial panel data from 2006 to 2023 was used, and the impacts of internet development on service sector carbon productivity were empirically investigated. The results indicated that internet development has a significant positive effect on service sector carbon productivity. Moreover, the effect of internet development on service sector carbon productivity is greater in eastern compared to central and western regions. Additionally, the impact of internet development is weaker in the commerce circulation service industry compared to other service sectors. The mechanism tests showed that internet development enhances service sector carbon productivity by promoting low-carbon technological advancements and optimizing resource allocation. Furthermore, higher levels of marketization and human capital amplify the positive effect of internet development on service sector carbon productivity.