Can digital transformation promote enterprise green innovation? Evidence from China

Abstract

Enterprise green innovation (EGI) is necessary to develop sustainably. With the continuous advancement of the digital economy, whether digital transformation (DT) can enhance the quantity and quality of green innovation in enterprises is an important issue that urgently needs to be explored. More importantly, the complex moderating roles of formal and informal institutions have not received sufficient attention. Based on the data of 3595 listed companies in China from 2011 to 2021, this study empirically analyzed the impact of DT on EGI. It tested the moderating role of environmental regulation (ER) and Confucian culture (Ru). The research found that (i) DT positively impacts EGI quantity and quality and can improve EGI quality better. This fundamental conclusion has passed various endogeneity and robustness tests. (ii) ER positively moderates the relationship between DT and EGI and can better moderate the relationship between DT and EGI quantity. (iii) When the Ru in a region is relatively high, the positive moderation effect of ER on the DT-EGI relationship is enhanced. (iv) The DT-EGI relationship is characterized by significant heterogeneity, like property rights, industry, and regional distribution. Specifically, the DT of state-owned enterprises, manufacturing enterprises, and enterprises in the central and western regions can better promote EGI. Therefore, managers should increase investment in DT to encourage enterprises to promote EGI actively. While strengthening environmental regulations, the government should also pay attention to the guidance of Ru and flexibly adjust relevant policies based on the heterogeneity of different enterprises to achieve the EGI effects of DT.