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From Smart Factories to Sustainable Enterprises: How Technological Innovation Bridges Intelligent Manufacturing and ESG Outcomes?

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  • Zhu Yangjin
  • Ying Hongbin
  • Adnan Khurshid
  • Javier Cifuentes‐Faura

Abstract

Intelligent manufacturing technology's influence on Environmental, Social, and Governance performance of firms (ESGP) has grown in importance as it continues to mature and be widely adopted. This study will examine the influence of intelligent manufacturing (IM) on ESGP on data from Chinese A‐share listed companies from 2010 to 2023. Specifically, it examines internal mechanisms through which IM improves ESGP, centering on the roles of technological innovation investment input (TII) and technological innovation output (TIO). The findings display that IM significantly improves ESGP, and this result remains robust across a series of rigorous robustness checks. Mechanism analysis reveals two primary channels through which IM drives ESGP improvement in the considered firms. These are increasing TII and enhancing TIO. Furthermore, the outcomes of the heterogeneity analysis show that the ESGP‐enhancing effects of IM are more prominent in non–state‐owned enterprises and firms located in the Western region, highlighting a differentiated impact across ownership structures and geographic contexts.

Suggested Citation

  • Zhu Yangjin & Ying Hongbin & Adnan Khurshid & Javier Cifuentes‐Faura, 2026. "From Smart Factories to Sustainable Enterprises: How Technological Innovation Bridges Intelligent Manufacturing and ESG Outcomes?," Business Strategy and the Environment, Wiley Blackwell, vol. 35(2), pages 2328-2345, February.
    • Handle: RePEc:bla:bstrat:v:35:y:2026:i:2:p:2328-2345
    DOI: 10.1002/bse.70297
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