Does digital economy development benefit low-carbon transition: evidence based on urban carbon lock-in

The carbon lock-in phenomenon coincides with urban growth due to the latter's significant reliance on fossil fuels with high carbon content. The impact of digital economy expansion on carbon lock-in remains uncertain, despite its emergence as a prominent catalyst for global progress. With panel data for 282 Chinese prefecture-level cities from 2011 to 2020, this study aims to test whether the digital economy inhibits carbon lock-in by using the system generalized method of moments model and by considering the moderating effects of government technology investments and environmental regulations according to the moderating model. The empirical evidence yields the following conclusions: (1) the digital economy has a significant negative impact on carbon lock-in in China; for every 1 percentage point rise in the digital economy, carbon lock-in decreases by 0.1072%; (2) both government technology investments and environmental regulations positively moderate the dampening effect of the digital economy on carbon lock-in; (3) the dampening effect of the digital economy on carbon lock-in is only significant in places with high economic development, in eastern areas, and in regions with high human capital; (4) each percentage point increase in the digital economy leads to a 0.1839% rise in technical innovation and a 0.0124% growth in digital financial inclusion, indicating that the digital economy has the potential to reduce carbon lock-in via both channels; (5) with each percentage point increase in the digital economy, carbon emissions decrease by 0.1829% and carbon intensity decreases by 0.0973%. The findings provide valuable policy suggestions that may guide China's digital economy in mitigating the growth of carbon lock-in.