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ORIGINAL RESEARCH
The Heterogeneous Impact of Economic
and Environmental Policy Uncertainty
on the Digital Economy: Fresh Evidence Based
on the Bilateral Stochastic Frontier Model
1
Business School, Guangdong Ocean University, Yangjiang, Guangdong, 529500, PR China
2
School of Foreign Business and Economics, Wuhan Textile University, Wuhan, Hubei, 430202, PR China
3
School of Economics and Management, Guangdong Songshan Vocational and Technical College,
Shaoguan, Guangdong, 512126, PR China
4
Hunan Geological Exploration Institute of China Metallurgical Geology Bureau, Changsha,
Hunan, 410000, PR China
These authors had equal contribution to this work
Submission date: 2024-02-12
Final revision date: 2024-03-29
Acceptance date: 2024-05-02
Online publication date: 2024-10-25
Publication date: 2025-01-28
Corresponding author
Pei Zhong
Hunan Geological Exploration Institute of China Metallurgical Geology Bureau, Changsha, Hunan, 410000, PR China
Hunan Geological Exploration Institute of China Metallurgical Geology Bureau, Changsha, Hunan, 410000, PR China
Pol. J. Environ. Stud. 2025;34(3):2647-2664
KEYWORDS
economic policy uncertaintyenvironmental policy uncertaintydigital economybilateral stochastic frontier model
TOPICS
ABSTRACT
It is known that the digital economy is also influenced by the uncertainties in economic and
environmental policies. Many studies have shown that the rise of economic and environmental policy
uncertainty significantly inhibits investment in the real economy. This study investigates the impact
of economic and environmental policy uncertainty on the development of the digital economy that
presents the characteristics of a virtual economy by using the panel data of 30 provinces in China
from 2011 to 2020. The bilateral impact of economic as well as environmental policy uncertainty and
its net effect are analyzed using a bilateral stochastic frontier model. The research results show that
economic and environmental policy uncertainty can both promote and inhibit the digital economy,
and the combined effect of the two makes the actual digital economy development level lower than
the frontier development level. Further, the role of economic policy uncertainty in promoting
the development of the digital economy has increased rapidly since 2017 and reached its peak
in 2019. The inhibitory effect of economic policy uncertainty on the development of the digital economy
has been declining year by year, accompanied by small fluctuations. Moreover, it is also found that there
is more inhibitory effect than promotion effect in terms of environmental policy uncertainty with digital
economic development. There are obvious spatial differences in the bilateral effects of economic policy
uncertainty on the development of the digital economy. The region with the largest inhibitory effect of economic policy uncertainty is mostly located in the eastern region, and the region
CONFLICT OF INTEREST
The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.
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