IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v142y2025ics0140988325000404.html
   My bibliography  Save this article

How does corporate digital transformation affect green innovation? Evidence from China's enterprise data

Author

Listed:
  • Zhang, Jian
  • Yu, Chin-Hsien
  • Zhao, Jinsong
  • Lee, Chi-Chuan

Abstract

Considering that corporate digital transformation plays a crucial role in promoting the sustainable growth of enterprises, the impact of this technological evolution on green innovation warrants additional investigation. Using firm-level data from China for the 2011–2020 period, our study demonstrates the influence of digital transformation on corporate green innovation. Our findings show that environmental information, when gathered through digital technologies, can guide firms in their green innovation efforts and assist in securing financial resources. Heterogeneity analysis suggests that in areas with stricter environmental regulations and non-high-tech firms, digital transformation exhibits a more pronounced ability to bolster green innovative capacity. Evidence also reveals the interplay between digital transformation and investors' green attention, indicating a notable positive influence on corporate green innovation. These insights provide valuable implications for both governments and corporations on how digital transformation can be harnessed to advance green innovation and achieve balanced sustainable development in both the economic and environmental dimensions.

Suggested Citation

  • Zhang, Jian & Yu, Chin-Hsien & Zhao, Jinsong & Lee, Chi-Chuan, 2025. "How does corporate digital transformation affect green innovation? Evidence from China's enterprise data," Energy Economics, Elsevier, vol. 142(C).
    • Handle: RePEc:eee:eneeco:v:142:y:2025:i:c:s0140988325000404
    DOI: 10.1016/j.eneco.2025.108217
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988325000404
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2025.108217?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Chen, Yufeng & Xu, Jing, 2023. "Digital transformation and firm cost stickiness: Evidence from China," Finance Research Letters, Elsevier, vol. 52(C).
    2. Lee, Chi-Chuan & Lee, Chien-Chiang, 2024. "Not all are alike: Assessing the effect of geopolitical risk on regional renewable energy development in China," Renewable Energy, Elsevier, vol. 222(C).
    3. Wang, Yaozhong & He, Pinzhen, 2024. "Enterprise digital transformation, financial information disclosure and innovation efficiency," Finance Research Letters, Elsevier, vol. 59(C).
    4. Nathan Nunn & Nancy Qian, 2014. "US Food Aid and Civil Conflict," American Economic Review, American Economic Association, vol. 104(6), pages 1630-1666, June.
    5. Hu, Haiqing & Wei, Wei & Chang, Chun-Ping, 2022. "Examining the impact of extreme temperature on green innovation in China: Evidence from city-level data," Energy Economics, Elsevier, vol. 114(C).
    6. Amihud, Yakov, 2002. "Illiquidity and stock returns: cross-section and time-series effects," Journal of Financial Markets, Elsevier, vol. 5(1), pages 31-56, January.
    7. Lu, Zhiqiang & Li, Hongyu, 2023. "Does environmental information disclosure affect green innovation?," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 47-59.
    8. Wiseman, Joanne, 1982. "An evaluation of environmental disclosures made in corporate annual reports," Accounting, Organizations and Society, Elsevier, vol. 7(1), pages 53-63, January.
    9. Hao, Jing & He, Feng, 2022. "Corporate social responsibility (CSR) performance and green innovation: Evidence from China," Finance Research Letters, Elsevier, vol. 48(C).
    10. Xu, Chao & Sun, Guanglin & Kong, Tao, 2024. "The impact of digital transformation on enterprise green innovation," International Review of Economics & Finance, Elsevier, vol. 90(C), pages 1-12.
    11. Li, Guangqin & Xue, Qing & Qin, Jiahong, 2022. "Environmental information disclosure and green technology innovation: Empirical evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    12. Chen, Yu & Zhang, Yujiao & Wang, Mingshan, 2024. "Green credit, financial regulation and corporate green innovation: Evidence from China," Finance Research Letters, Elsevier, vol. 59(C).
    13. Lee, Chi-Chuan & Song, Hepeng & Lee, Chien-Chiang, 2023. "Assessing the effect of green finance on energy inequality in China via household-level analysis," Energy Economics, Elsevier, vol. 128(C).
    14. Jie, Guo & Jiahui, Lv, 2023. "Media attention, green technology innovation and industrial enterprises’ sustainable development: The moderating effect of environmental regulation," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 873-889.
    15. Li, Yaya & Zhang, Yun, 2023. "What is the role of green ICT innovation in lowering carbon emissions in China? A provincial-level analysis," Energy Economics, Elsevier, vol. 127(PA).
    16. Nnamdi O. Madichie & Elvira Bolat & Nasiru Taura, 2021. "Digital transformation in West Africa: a two country, two-sector analysis," Journal of Enterprising Communities: People and Places in the Global Economy, Emerald Group Publishing Limited, vol. 15(2), pages 246-257, April.
    17. Guo, Xiaochuan & Li, Mengmeng & Wang, Yanlin & Mardani, Abbas, 2023. "Does digital transformation improve the firm’s performance? From the perspective of digitalization paradox and managerial myopia," Journal of Business Research, Elsevier, vol. 163(C).
    18. Paul Chiambaretto & Sara Laurent & Ulrike Schmalz & Mengying Fu & Audrey Rouyre & Camille Bildstein & Anne-Sophie Fernandez, 2024. "Are consumers willing to pay more for green innovations? Insights from the air transport industry," Post-Print hal-04791158, HAL.
    19. Zhou, Bo & Ding, Hao, 2023. "How public attention drives corporate environmental protection: Effects and channels," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    20. Lee, Chi-Chuan & Li, Mingyue & Li, Xinghao & Song, Hepeng, 2025. "More green digital finance with less energy poverty? The key role of climate risk," Energy Economics, Elsevier, vol. 141(C).
    21. Gong, Cheng & Ribiere, Vincent, 2021. "Developing a unified definition of digital transformation," Technovation, Elsevier, vol. 102(C).
    22. Li, Tingting & Meng, Xiangrui & Wang, Weiqing & Yang, Deyong & Nie, Mengxun & Zhang, Qingyu, 2024. "Does green credit policy matter for corporate sustainable innovation? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 1788-1806.
    23. Amihud, Yakov & Mendelson, Haim & Lauterbach, Beni, 1997. "Market microstructure and securities values: Evidence from the Tel Aviv Stock Exchange," Journal of Financial Economics, Elsevier, vol. 45(3), pages 365-390, September.
    24. Ming, Yaxin & Li, Yubo & Liu, Nian & Li, Jing, 2023. "Retail investor attention and corporate environmental performance: Evidence from china," Finance Research Letters, Elsevier, vol. 56(C).
    25. Wanyi Chen & Liguang Zhang & Pinyan Jiang & Fanli Meng & Qianyi Sun, 2022. "Can digital transformation improve the information environment of the capital market? Evidence from the analysts' prediction behaviour," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(2), pages 2543-2578, June.
    26. Tang, Wenguang & Mai, Liuqing & Li, Meifeng, 2023. "Green innovation and resource efficiency to meet net-zero emission," Resources Policy, Elsevier, vol. 86(PB).
    27. Chi-Chuan Lee & Jian Zhang & Chin-Hsien Yu & Lei Fang, 2023. "How Does Geopolitical Risk Affect Corporate Innovation? Evidence from China’s Listed Companies," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 59(7), pages 2217-2233, May.
    28. Haidong Li & Ziming Qian & Shanyong Wang & Jing Wang & Qian Wang, 2023. "Do green concerns promote corporate green innovation? Evidence from Chinese stock exchange interactive platforms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1786-1801, April.
    29. Pastor, Lubos & Stambaugh, Robert F., 2003. "Liquidity Risk and Expected Stock Returns," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 642-685, June.
    30. Wang, Lan, 2023. "Digital transformation and total factor productivity," Finance Research Letters, Elsevier, vol. 58(PA).
    31. Fang, Zhenming & Kong, Xiaoran & Sensoy, Ahmet & Cui, Xin & Cheng, Feiyang, 2021. "Government’s awareness of Environmental protection and corporate green innovation: A natural experiment from the new environmental protection law in China," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 294-312.
    32. Ghosh, Swapan & Hughes, Mat & Hodgkinson, Ian & Hughes, Paul, 2022. "Digital transformation of industrial businesses: A dynamic capability approach," Technovation, Elsevier, vol. 113(C).
    33. He, Feng & Yan, Yulin & Hao, Jing & Wu, Ji (George), 2022. "Retail investor attention and corporate green innovation: Evidence from China," Energy Economics, Elsevier, vol. 115(C).
    34. Zhang, Wenqiu & Zhao, Junli, 2023. "Digital transformation, environmental disclosure, and environmental performance: An examination based on listed companies in heavy-pollution industries in China," International Review of Economics & Finance, Elsevier, vol. 87(C), pages 505-518.
    35. Charles J. Hadlock & Joshua R. Pierce, 2010. "New Evidence on Measuring Financial Constraints: Moving Beyond the KZ Index," The Review of Financial Studies, Society for Financial Studies, vol. 23(5), pages 1909-1940.
    36. Zhao, Xiaoxia & Cai, Lianghui, 2023. "Digital transformation and corporate ESG: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PA).
    37. Bendig, David & Schulz, Colin & Theis, Lukas & Raff, Stefan, 2023. "Digital orientation and environmental performance in times of technological change," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    38. Zhonghao Lei & Dongmei Wang, 2023. "Digital transformation and total factor productivity: Empirical evidence from China," PLOS ONE, Public Library of Science, vol. 18(10), pages 1-18, October.
    39. Weizhou Su & Gaowen Lei & Sidai Guo & Hongche Dan, 2022. "Study on the Influence Mechanism of Environmental Management System Certification on Enterprise Green Innovation," IJERPH, MDPI, vol. 19(19), pages 1-20, September.
    40. Chiambaretto, Paul & Laurent, Sara & Schmalz, Ulrike & Fu, Mengying & Rouyre, Audrey & Bildstein, Camille & Fernandez, Anne-Sophie, 2024. "Are consumers willing to pay more for green innovations? Insights from the air transport industry," Technovation, Elsevier, vol. 137(C).
    41. Guo, Borui & Huang, Xiaoxia, 2024. "Digital transformation tone signal and the cost of equity: Evidence from Chinese listed companies," Finance Research Letters, Elsevier, vol. 59(C).
    42. Lee, Chi-Chuan & Song, Hepeng & An, Jiafu, 2024. "The impact of green finance on energy transition: Does climate risk matter?," Energy Economics, Elsevier, vol. 129(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jie Dou & Junyi Dou & Meng Qin & Chi-Wei Su, 2025. "Towards Sustainable Development: Assessing the Significance of World Uncertainty in Green Technology Innovation," Sustainability, MDPI, vol. 17(3), pages 1-20, February.
    2. Ling Huang & AL-Barakani Abdo & Nadeem Aljonaid, 2025. "Digital Transformation and Carbon Reduction in Chinese Industrial Enterprises: Mediating Role of Green Innovation and Moderating Effects of ESG Practices," Sustainability, MDPI, vol. 17(9), pages 1-25, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xiao, Zhongyi & Li, Yuanling & Xiang, Cheng, 2025. "Do suppliers value customer firms' digital transformation? Evidence from trade credit provision," International Review of Financial Analysis, Elsevier, vol. 99(C).
    2. Jiang, Qian & Zhang, Chaoshuai & Wei, Qianqing, 2025. "Digital technology adoption and enterprise investment efficiency," Finance Research Letters, Elsevier, vol. 72(C).
    3. Li, Yunzhong & Zhao, Yu & Ye, Chengfang & Li, Xiaofan & Tao, Yunqing, 2024. "ESG ratings and the cost of equity capital in China," Energy Economics, Elsevier, vol. 136(C).
    4. Hao, Xiaoli & Miao, Erxiang & Sun, Qingyu & Li, Ke & Wen, Shufang & Xue, Yan, 2024. "The impact of digital government on corporate green innovation: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 206(C).
    5. Cao, June & Huang, Zijie & Kristanto, Ari Budi, 2025. "From bytes to blooms: Tech-driven transformation and green revenues," Energy Economics, Elsevier, vol. 144(C).
    6. Zhang, Kaixia & Bu, Caiqi, 2024. "Top managers with information technology backgrounds and digital transformation: Evidence from small and medium companies," Economic Modelling, Elsevier, vol. 132(C).
    7. Wang, Fengrong & Mbanyele, William & Muchenje, Linda, 2022. "Economic policy uncertainty and stock liquidity: The mitigating effect of information disclosure," Research in International Business and Finance, Elsevier, vol. 59(C).
    8. Lai, Karen M.Y. & Saffar, Walid & Zhu, Xindong (Kevin) & Liu, Yiye, 2020. "Political institutions, stock market liquidity and firm dividend policy: Some international evidence," Journal of Contemporary Accounting and Economics, Elsevier, vol. 16(1).
    9. Lischewski, Judith & Voronkova, Svitlana, 2012. "Size, value and liquidity. Do They Really Matter on an Emerging Stock Market?," Emerging Markets Review, Elsevier, vol. 13(1), pages 8-25.
    10. Karstanje, Dennis & Sojli, Elvira & Tham, Wing Wah & van der Wel, Michel, 2013. "Economic valuation of liquidity timing," Journal of Banking & Finance, Elsevier, vol. 37(12), pages 5073-5087.
    11. Nagano, Mamoru, 2018. "What promotes/prevents firm bond issuance in emerging economies: Bank–firm relationship or information asymmetry?," International Review of Economics & Finance, Elsevier, vol. 56(C), pages 161-177.
    12. Yu, Haixu & Liang, Chuanyu & Liu, Zhaohua & Wang, He, 2023. "News-based ESG sentiment and stock price crash risk," International Review of Financial Analysis, Elsevier, vol. 88(C).
    13. Huang, Hongyun & Mbanyele, William & Wang, Fengrong & Song, Malin & Wang, Yuzhang, 2022. "Climbing the quality ladder of green innovation: Does green finance matter?," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    14. Sun, Zhiyao & Che, Shuai & Wang, Jie, 2024. "Deconstruct artificial intelligence's productivity impact: A new technological insight," Technology in Society, Elsevier, vol. 79(C).
    15. Shi, Peihao & Huang, Qinghua, 2025. "Alignment of words and actions? Government environmental attention and enterprise digital transformation," Technological Forecasting and Social Change, Elsevier, vol. 210(C).
    16. Li, Xiafei & Luo, Di, 2019. "Financial constraints, stock liquidity, and stock returns," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 63(C).
    17. Guo, Panting & Bi, Jiefeng & Zhu, Mengnan, 2025. "Enterprise digital transformation and investment efficiency: Empirical evidence from listed enterprises in China," Journal of Asian Economics, Elsevier, vol. 97(C).
    18. Hatch, Brian C. & Johnson, Shane A. & Wang, Qin Emma & Zhang, Jun, 2021. "Algorithmic trading and firm value," Journal of Banking & Finance, Elsevier, vol. 125(C).
    19. He, Feng & Feng, Yaqian & Hao, Jing, 2023. "Corporate ESG rating and stock market liquidity: Evidence from China," Economic Modelling, Elsevier, vol. 129(C).
    20. Armanious, Amir & Zhao, Ruoyun, 2024. "Stock liquidity effect on leverage: The role of debt security, financial constraint, and risk around the global financial crisis and Covid-19 pandemic," International Review of Financial Analysis, Elsevier, vol. 92(C).

    More about this item

    Keywords

    Digital transformation; Green innovation; Green attention; China;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:142:y:2025:i:c:s0140988325000404. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.