The digital economy (DE) plays a crucial role in green innovation (GI) and green development as a new economic form. Based on the panel data of 274 Chinese prefecture-level cities from 2011 to 2019, this paper constructs a comprehensive DE index and conducts two-way fixed effect regression to explore its impact on GI capabilities and examines the mediating effect of industrial structure transformation and upgrading. The research results show that: (1) The development of the DE has significantly improved the GI capability of cities. (2) In terms of space, the development of DE and GI ability development in eastern cities outperform that in central and western regions. However, the development of eastern cities is almost saturated and slow, while the development of central and western cities is faster. (3) The DE has a significant role in promoting GI capabilities in the central and western regions. Although the eastern region has a positive impact, it is negligible. In terms of urban scale, the DE of the large, medium, and small cities positively affects GI capabilities to the effect. (4) The transformation and upgrading of the industrial structure mediate the relationship between the DE and GI. Based on the above conclusions, relevant suggestions for improving GI capabilities around the development of the DE and industrial transformation and upgrading must be devised.

Recent developments in attaining carbon peaks and achieving carbon neutrality have had enormous effects on the world economy. Digitalization has been considered a viable way to curtail carbon emissions (CE) and promote sustainable economic development, but scant empirical studies investigate the link between digitalization and CE. In this context, this study constructs the digitalization index using the entropy value method and spatial Markov chain, and the spatial Durbin model is employed to analyze its impact mechanism and influence on urban CE in 265 prefecture-level cities and municipalities in China from 2011 to 2017. The results indicate that: (1) The overall development level of the digital economy (DE) posed a significant spatial effect on urban environmental pollution. However, the effect varies according to the different neighborhood backgrounds. (2) The DE impedes urban environmental deterioration directly and indirectly through the channels of industrial structure, inclusive finance, and urbanization. (3) The development of the DE significantly reduces pollution in cities belonging to urban agglomerations, while the development of the DE escalates emissions in nonurban agglomeration cities. Finally, based on the results, important policy implications are put forward to improve the environmental quality of cities.