Study of the Spatio-Temporal Effects of Digital Economic Development on Hydropower Resource Mismatch

Optimizing the allocation of hydropower resources is essential for aligning high-quality economic growth with China’s carbon neutrality goals. Due to constraints such as market segmentation and government regulation, the resource allocation function of the Chinese market has not been effectively utilized, which leads to hydropower resources being allocated inefficiently. In the digital age, it is valuable to investigate whether digital economic development can rectify the misallocation of hydropower resources and whether the corrective effects exhibit temporal dynamics and spatial heterogeneity. Accordingly, this study employs panel data collected from 30 provincial-level administrative regions in China from 2000 to 2023, employing the production function method combined with a counterfactual analysis framework for quantifying the degree of hydropower resource mismatch. Additionally, panel vector autoregression models and panel threshold regression utilized for discussing spatio-temporal effects of digital economic development on hydropower resource mismatch. Empirical results demonstrate that digital economic development significantly curbs hydropower resource misallocation, albeit with a discernible time lag. When the digital economy experiences a positive impulse shock, its impact on the hydropower resources mismatch emerges in the first lag period, peaks in the second lag period, and then stabilizes. Secondly, the corrective impact of digital economic development on hydropower resources mismatch is contingent upon the level of regional industrialization, which is more pronounced in regions with higher levels of industrialization. In conclusion, this paper offers evidence-based policy recommendations to facilitate the localized implementation of digital economy policies and enhance the efficiency of hydropower resources allocation.