Trade and Environmental Performance: How Digital Trade Promotes Sustainable Development in Developing Countries

ABSTRACT Against the backdrop of sustainable development, the relationship between trade and environmental performance is becoming increasingly close. Compared with traditional trade, digital trade offers the advantages of lower carbon emissions and reduced energy consumption, providing strong support for environmental governance and economic growth in developing countries. With the continuous advancement of digital technologies and the deepening of global economic integration, digital trade is expected to play a greater role in the future, contributing more to global sustainable development. Based on data from 82 developing countries covering the period 2012–2022, this paper constructs a two‐way fixed‐effects model to investigate the impact of digital trade on sustainable development in developing countries. The findings reveal a significant positive correlation between digital trade and the level of sustainable development in developing countries, a conclusion that remains valid following a series of robustness tests. Heterogeneity tests indicate that the promotional effect of digital trade on sustainable development is more pronounced in middle‐income developing countries, low‐income developing countries, developing countries in the Americas, and developing countries in Africa. This study not only examines the unique mechanisms through which digital trade influences sustainable development at the macro‐national level—thereby providing empirical evidence for understanding the relationship between digital trade and sustainable development—but also offers important guidance for developing countries when formulating relevant policies.