Can digital transformation change a firm's green innovation strategy? Evidence from China's heavily polluting industries.

Hongfei Cheng, Yuxin Li, Yaling Pang, Jing Zhao, Kui Fu
Author Information
  1. Hongfei Cheng: School of Economics and Management, Shihezi University, Shihezi, 832003, China.
  2. Yuxin Li: School of Economics and Management, Shihezi University, Shihezi, 832003, China.
  3. Yaling Pang: School of Economics and Management, Shihezi University, Shihezi, 832003, China.
  4. Jing Zhao: College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing, 210016, China.
  5. Kui Fu: School of Economics and Management, Shihezi University, Shihezi, 832003, China.

Abstract

Enterprises are facing the superimposed challenges of digitalization and greening. The shift from reactive green technology innovation (RGT) to proactive green technology innovation (PGT) has special significance for sustainable economic development. Which strategies will companies choose? Can digital transformation (DT) motivate companies to transform their green innovation strategies? Enterprises' green innovation strategy choices must be explained with regard to digitalization. The purpose of this paper is to reveal how digitalization affects the choice of green innovation strategies and to provide a realistic basis for the sustainable development of heavily polluting enterprises. We formulated a "DT-capability-strategy" theoretical framework incorporating external constraints and internal attitudes to empirically test the microdata of 505 heavily polluting enterprises. The results show that: (1) DT can shift the heavily polluting enterprises' green innovation strategies from RGT to PGT. Endogenous tests and robustness tests support this conclusion. (2) A mechanism test shows that environmental regulations cannot significantly regulate a green innovation strategy. Only a company's capabilities and attitudes can influence PGT but their effects on RGT are not statistically significant. (3) The influence of DT on green innovation strategies shows multi-dimensional heterogeneity in the digital infrastructure, scale, and innovation level of the enterprise. The conclusions provide implications for enterprises to integrate their digital and green behaviors.

Keywords

References

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Word Cloud

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