How does digitization enable green innovation? Evidence from Chinese listed companies

Abstract

The coordinated development of digitization and greening is an essential requirement for the sustainable development of the global economy. With the rapid development of the digital economy, enterprises are facing a new external environment for green innovation. This paper uses the robust principal component analysis method to construct the digital economy development index for Chinese prefecture‐level or above cities from 2012 to 2019 and examines the impact of the digital economy on corporate green innovation. It is found that the development of the digital economy can stimulate corporate green innovation by alleviating financing constraints, improving internal control, and reducing environmental uncertainty. This study further reveals that both increasing government environmental regulation and stronger judicial guarantees can enhance the positive impact of digitization. This research aims to provide inspiration and reference on how better to integrate digital economy development and corporate green innovation.

Integrating ESG into Corporate Strategy: Unveiling the Moderating Effect of Digital Transformation on Green Innovation through Employee Insights

“…The authors found that digital transformation improves innovation performance by enhancing the strategic agility of enterprises [37]. Enterprise digital transformation enhances green innovation by easing financing constraints, reducing agency costs, and stimulating growth potential [38]. Not only that, digital transformation improves corporate ESG performance through environmentally friendly digital technology and becomes a "technical reservoir" that supports green development [39].…”

Can digital economy foster synergistic increases in green innovation and corporate value? Evidence from China

“…By leveraging economies of scale, economies of scope, and other factors, the digital economy is capable of reducing the cost of information communication [ 16 , 17 ] and enhancing production efficiency [ 18 , 19 ], thereby stimulating GI [ 20 , 21 ]. Externally, the advancement of the digital economy can bolster companies’ green innovation through various means, such as boosting economic openness, optimizing industrial structure, expanding market potential, increasing media visibility, and reducing environmental uncertainty [ 6 , 14 , 22 , 23 ]. Internally, digital progress can drive green innovation by refining human capital structures, easing financial constraints, enhancing internal controls, strengthening human capital, and fostering the enhancement of the enterprise value chain [ 5 , 24 , 25 ].…”

Impact of digital empowerment on labor employment in manufacturing enterprises: Evidence from China

“…Furthermore, the deep integration of digital empowerment and the real economy can help accelerate the digital transformation of industry. In particular, digital empowerment has become a key engine for companies to access new opportunities and paths for growth [ [4] , [5] , [6] ]. According to the Digital China Development Report (2022) released by the National Internet Information Office, China's digital economy is 50.2 (7.2) trillion yuan (dollars) in 2022, ranking second in the world.…”