Does enterprise digital transformation contribute to green innovation? Micro-level evidence from China.

ABSTRACT

The synergy of digitalization and greening has emerged as a prominent means to achieve the goal of "carbon peaking and carbon neutrality". Given its significant contribution to carbon emissions, the impact of digital transformation on green innovation in manufacturing enterprises remains a longstanding research hotspot. Therefore, based on the data from China A-share listed manufacturing companies spanning from 2007 to 2022, this paper empirically analyzes the influence and mechanism of digital transformation on green innovation. Our findings reveal that digital transformation can significantly promote green innovation in manufacturing enterprises, with a particularly pronounced effect on substantive green innovation. These conclusions withstand rigorous robustness tests. Mechanism analysis shows that digital transformation can facilitate green innovation by improving internal control quality and fostering industry-university-research cooperation. Moreover, our moderation analysis reveals that both equity incentives and compensation incentives strengthen the positive relationship between digital transformation and green innovation in manufacturing enterprises. Heterogeneity analysis proves that digital transformation exerts a more pronounced impact on green innovation of state-owned manufacturing enterprises, non-heavily polluted manufacturing enterprises, and enterprises located in regions with strong intellectual property protection. Furthermore, the transformation of digital underlying technologies is more conducive to fostering green innovation compared to practical application transformation. Subsequent investigation into the economic and social effects of green innovation indicates that it effectively reduces pollution emissions from manufacturing enterprises without compromising their development. Additionally, the emission reduction and income-generating effect resulting from digital transformation primarily manifest through substantive green innovation. This research expands upon the theory regarding the impact of digital transformation on green innovation in micro-manufacturing enterprises, providing empirical support for facilitating low-carbon transformations among manufacturing enterprises under the goal of "carbon peaking and carbon neutrality".