How does heterogeneous industrial agglomeration affect the total factor energy efficiency of China's digital economy

Digital economy has raised hopes for enhancing total factor energy efficiency (TFEE). This study constructs a comprehensive evaluation model in which, under the moderating effect of the digitalization development level (DDL), heterogeneous industrial agglomeration affects industrial structure adjustment and ultimately TFEE. The theoretical model is empirically tested by a provincial-level panel data set during 2006–2019, using mediation and mediation analysis combined with sample splitting analysis. The three notable results are as follows. (1) There is an inverted N-shaped nexus between specialized industrial agglomeration (SIA) and TFEE, and an N-shaped nexus between diversified industrial agglomeration (DIA) and TFEE. TFEE demonstrates a significant snowball effect in time dimension and a strategic competition effect in spatial dimension. (2) Industrial structure upgrading and optimization partially mediate the nexus between heterogeneous industrial agglomeration and TFEE. (3) DDL not only positively moderates the nexus between SIA or DIA and TFEE but also positively moderates the relationship between SIA*DIA and TFEE. The results are robust under various statistical estimates. This study provides useful policy implications for promoting digital economy and TFEE.