IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v259y2023ics0925527323000543.html
   My bibliography  Save this article

Digital investment and environmental performance: The mediating roles of production efficiency and green innovation

Author

Listed:
  • Ye, Fei
  • Ouyang, You
  • Li, Yina

Abstract

Although digital investment is expected to achieve a win-win condition of economic growth and environmental conservation, little is known about the processes through which it improves environmental performance. Drawing on the natural resource-based view, this study explores how digital investment can affect environmental performance through the mediating roles of production efficiency and green innovation. Using a sample of 273 Chinese pollution-intensive firms with 1009 observations over the period 2016–2020, this study provides robust evidence that digital investment can improve environmental performance, and that production efficiency and green innovation play partially mediating roles in the above relationship. A heterogeneity analysis shows that the positive role of digital investment on environmental performance is only significant in state-owned firms and heavy industrial firms but not in private firms and light industrial firms. Interestingly, the environmental impact of digital investment in heavy industrial firms is achieved by improving efficiency, while in state-owned firms, both production efficiency and green innovation play a mediating role. The findings suggest how both managers and policy makers can leverage digital investment to achieve sustainable development in the industry 4.0 era.

Suggested Citation

  • Ye, Fei & Ouyang, You & Li, Yina, 2023. "Digital investment and environmental performance: The mediating roles of production efficiency and green innovation," International Journal of Production Economics, Elsevier, vol. 259(C).
    • Handle: RePEc:eee:proeco:v:259:y:2023:i:c:s0925527323000543
    DOI: 10.1016/j.ijpe.2023.108822
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527323000543
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2023.108822?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. Zhou, Qian & Zhong, Shihu & Shi, Tao & Zhang, Xiaoling, 2021. "Environmental regulation and haze pollution: Neighbor-companion or neighbor-beggar?," Energy Policy, Elsevier, vol. 151(C).
    2. Ye, Fei & Liu, Ke & Li, Lixu & Lai, Kee-Hung & Zhan, Yuanzhu & Kumar, Ajay, 2022. "Digital supply chain management in the COVID-19 crisis: An asset orchestration perspective," International Journal of Production Economics, Elsevier, vol. 245(C).
    3. Thi Hong Van Hoang & Justyna Przychodzen & Wojciech Przychodzen & Elysé Segbotangni, 2020. "Does it pay to be green? A disaggregated analysis of US firms with green patents," Post-Print hal-02518497, HAL.
    4. Song, Malin & Peng, Licheng & Shang, Yuping & Zhao, Xin, 2022. "Green technology progress and total factor productivity of resource-based enterprises: A perspective of technical compensation of environmental regulation," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    5. Gongbing Bi & Yan Luo & Jingjing Ding & Liang Liang, 2015. "Environmental performance analysis of Chinese industry from a slacks-based perspective," Annals of Operations Research, Springer, vol. 228(1), pages 65-80, May.
    6. Sakaki, Hamid & Jory, Surendranath Rakesh, 2019. "Institutional investors' ownership stability and firms' innovation," Journal of Business Research, Elsevier, vol. 103(C), pages 10-22.
    7. Shangrong Jiang & Yuze Li & Quanying Lu & Yongmiao Hong & Dabo Guan & Yu Xiong & Shouyang Wang, 2021. "Policy assessments for the carbon emission flows and sustainability of Bitcoin blockchain operation in China," Nature Communications, Nature, vol. 12(1), pages 1-10, December.
    8. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    9. Yu, Jian & Shi, Xunpeng & Guo, Dongmei & Yang, Longjian, 2021. "Economic policy uncertainty (EPU) and firm carbon emissions: Evidence using a China provincial EPU index," Energy Economics, Elsevier, vol. 94(C).
    10. Alkaraan, Fadi & Albitar, Khaldoon & Hussainey, Khaled & Venkatesh, VG, 2022. "Corporate transformation toward Industry 4.0 and financial performance: The influence of environmental, social, and governance (ESG)," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    11. Chirumalla, Koteshwar, 2021. "Building digitally-enabled process innovation in the process industries: A dynamic capabilities approach," Technovation, Elsevier, vol. 105(C).
    12. Yuan, Rongli & Wen, Wen, 2018. "Managerial foreign experience and corporate innovation," Journal of Corporate Finance, Elsevier, vol. 48(C), pages 752-770.
    13. Kraus, Sascha & Rehman, Shafique Ur & García, F. Javier Sendra, 2020. "Corporate social responsibility and environmental performance: The mediating role of environmental strategy and green innovation," Technological Forecasting and Social Change, Elsevier, vol. 160(C).
    14. Hua Wang & Yanhong Jin, 2007. "Industrial Ownership and Environmental Performance: Evidence from China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 36(3), pages 255-273, March.
    15. Kai Ding & Felix T.S. Chan & Xudong Zhang & Guanghui Zhou & Fuqiang Zhang, 2019. "Defining a Digital Twin-based Cyber-Physical Production System for autonomous manufacturing in smart shop floors," International Journal of Production Research, Taylor & Francis Journals, vol. 57(20), pages 6315-6334, October.
    16. AlNuaimi, Bader K. & Singh, Sanjay Kumar & Harney, Brian, 2021. "Unpacking the role of innovation capability: Exploring the impact of leadership style on green procurement via a natural resource-based perspective," Journal of Business Research, Elsevier, vol. 134(C), pages 78-88.
    17. Sachin B. Modi & David E. Cantor, 2021. "How Coopetition Influences Environmental Performance: Role of Financial Slack, Leverage, and Leanness," Production and Operations Management, Production and Operations Management Society, vol. 30(7), pages 2046-2068, July.
    18. Feng, Yunting & Lai, Kee-hung & Zhu, Qinghua, 2022. "Green supply chain innovation: Emergence, adoption, and challenges," International Journal of Production Economics, Elsevier, vol. 248(C).
    19. Horacio E. Rousseau, 2017. "Corporate Sustainability: Toward a Theoretical Integration of Catholic Social Teaching and the Natural-Resource-Based View of the Firm," Journal of Business Ethics, Springer, vol. 145(4), pages 725-737, November.
    20. Chee Yew Wong & Christina W.Y. Wong & Sakun Boon-itt, 2020. "Effects of green supply chain integration and green innovation on environmental and cost performance," International Journal of Production Research, Taylor & Francis Journals, vol. 58(15), pages 4589-4609, July.
    21. Verhoef, Peter C. & Broekhuizen, Thijs & Bart, Yakov & Bhattacharya, Abhi & Qi Dong, John & Fabian, Nicolai & Haenlein, Michael, 2021. "Digital transformation: A multidisciplinary reflection and research agenda," Journal of Business Research, Elsevier, vol. 122(C), pages 889-901.
    22. Hall, Jeremy K. & Daneke, Gregory A. & Lenox, Michael J., 2010. "Sustainable development and entrepreneurship: Past contributions and future directions," Journal of Business Venturing, Elsevier, vol. 25(5), pages 439-448, September.
    23. Hamilton, Stephen F. & Requate, Till, 2012. "Emissions standards and ambient environmental quality standards with stochastic environmental services," Journal of Environmental Economics and Management, Elsevier, vol. 64(3), pages 377-389.
    24. Terence J. V. Saldanha & Dongwon Lee & Sunil Mithas, 2020. "Aligning Information Technology and Business: The Differential Effects of Alignment During Investment Planning, Delivery, and Change," Information Systems Research, INFORMS, vol. 31(4), pages 1260-1281, December.
    25. Li, Ying & Dai, Jing & Cui, Li, 2020. "The impact of digital technologies on economic and environmental performance in the context of industry 4.0: A moderated mediation model," International Journal of Production Economics, Elsevier, vol. 229(C).
    26. Nicola Jones, 2018. "How to stop data centres from gobbling up the world’s electricity," Nature, Nature, vol. 561(7722), pages 163-166, September.
    27. Won-Sik Hwang & Ho-Sung Kim, 2022. "Does the adoption of emerging technologies improve technical efficiency? Evidence from Korean manufacturing SMEs," Small Business Economics, Springer, vol. 59(2), pages 627-643, August.
    28. Feng, Yunting & Lai, Kee-hung & Zhu, Qinghua, 2020. "Legitimacy in operations: How sustainability certification announcements by Chinese listed enterprises influence their market value?," International Journal of Production Economics, Elsevier, vol. 224(C).
    29. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    30. Prithwiraj Choudhury & Martine R. Haas, 2018. "Scope versus speed: Team diversity, leader experience, and patenting outcomes for firms," Strategic Management Journal, Wiley Blackwell, vol. 39(4), pages 977-1002, April.
    31. Lange, Steffen & Pohl, Johanna & Santarius, Tilman, 2020. "Digitalization and energy consumption. Does ICT reduce energy demand?," Ecological Economics, Elsevier, vol. 176(C).
    32. Miao, Zhuang & Baležentis, Tomas & Shao, Shuai & Chang, Dongfeng, 2019. "Energy use, industrial soot and vehicle exhaust pollution—China's regional air pollution recognition, performance decomposition and governance," Energy Economics, Elsevier, vol. 83(C), pages 501-514.
    33. Albert Czerny & Peter Letmathe, 2017. "Eco‐efficiency: GHG reduction related environmental and economic performance. The case of the companies participating in the EU Emissions Trading Scheme," Business Strategy and the Environment, Wiley Blackwell, vol. 26(6), pages 791-806, September.
    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. Lijuan Tao & Xiaoju Wei & Wenjing Wang, 2023. "Does Enterprise Internal Control Improve Environmental Performance—Empirical Evidence from China," Sustainability, MDPI, vol. 15(13), pages 1-20, June.
    2. Qingqing Zhao & Xintao Li & Siqi Li, 2023. "Analyzing the Relationship between Digital Transformation Strategy and ESG Performance in Large Manufacturing Enterprises: The Mediating Role of Green Innovation," Sustainability, MDPI, vol. 15(13), pages 1-22, June.
    3. Chunrong Yan & Xintian Xiang & Liping Li & Guoxiang Li, 2023. "Environmental Credit Constraints and the Enterprise Choice of Environmental Protection Behavior," Sustainability, MDPI, vol. 15(24), pages 1-24, December.
    4. Chunfeng Dong & Jun He & Longzheng Du & Jing Yang, 2023. "Executives with Environmental Experience and Corporate Environmental Performance: Evidence from China’s A-Share Listed Companies," Sustainability, MDPI, vol. 15(20), pages 1-22, October.
    5. Borui Guo & Xiaoxia Huang, 2023. "Role of Digital Transformation on Carbon Performance: Evidence from Firm-Level Analysis in China," Sustainability, MDPI, vol. 15(18), pages 1-18, September.

    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. Du, Juntao & Shen, Zhiyang & Song, Malin & Zhang, Linda, 2023. "Nexus between digital transformation and energy technology innovation: An empirical test of A-share listed enterprises," Energy Economics, Elsevier, vol. 120(C).
    2. 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).
    3. Benkraiem, Ramzi & Dubocage, Emmanuelle & Lelong, Yann & Shuwaikh, Fatima, 2023. "The effects of environmental performance and green innovation on corporate venture capital," Ecological Economics, Elsevier, vol. 210(C).
    4. Wen, Huwei & Zhong, Qiming & Lee, Chien-Chiang, 2022. "Digitalization, competition strategy and corporate innovation: Evidence from Chinese manufacturing listed companies," International Review of Financial Analysis, Elsevier, vol. 82(C).
    5. Rongwu Zhang & Lan Luo & Jianjun Du, 2023. "The influence of fiscal policy uncertainty on corporate total factor productivity: Evidence from Chinese public companies," Contemporary Economic Policy, Western Economic Association International, vol. 41(3), pages 532-554, July.
    6. Zhu, Qing & Ma, Dan & He, Xin, 2023. "Digital transformation and firms' pollution emissions," Technological Forecasting and Social Change, Elsevier, vol. 197(C).
    7. Lai, Kee-hung & Feng, Yunting & Zhu, Qinghua, 2023. "Digital transformation for green supply chain innovation in manufacturing operations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 175(C).
    8. Rodríguez-Pose, Andrés & Tselios, Vassilis & Winkler, Deborah & Farole, Thomas, 2013. "Geography and the Determinants of Firm Exports in Indonesia," World Development, Elsevier, vol. 44(C), pages 225-240.
    9. Jinqiu He & Huiwen Su, 2022. "Digital Transformation and Green Innovation of Chinese Firms: The Moderating Role of Regulatory Pressure and International Opportunities," IJERPH, MDPI, vol. 19(20), pages 1-21, October.
    10. Alkaraan, Fadi & Elmarzouky, Mahmoud & Hussainey, Khaled & Venkatesh, V.G., 2023. "Sustainable strategic investment decision-making practices in UK companies: The influence of governance mechanisms on synergy between industry 4.0 and circular economy," Technological Forecasting and Social Change, Elsevier, vol. 187(C).
    11. Shunbin Zhong & Huafu Shen & Ziheng Niu & Yang Yu & Lin Pan & Yaojun Fan & Atif Jahanger, 2022. "Moving towards Environmental Sustainability: Can Digital Economy Reduce Environmental Degradation in China?," IJERPH, MDPI, vol. 19(23), pages 1-23, November.
    12. Xu He & Qin-Lei Jing, 2022. "The Impact of Environmental Tax Reform on Total Factor Productivity of Heavy-Polluting Firms Based on a Dual Perspective of Technological Innovation and Capital Allocation," Sustainability, MDPI, vol. 14(22), pages 1-17, November.
    13. Ana Salomé García-Muñiz & María Rosalía Vicente, 2021. "The Effects of Informational Feedback on the Energy Consumption of Online Services: Some Evidence for the European Union," Energies, MDPI, vol. 14(10), pages 1-14, May.
    14. Ge Zhang & Yuxiang Gao & Gaoyong Li, 2023. "Research on Digital Transformation and Green Technology Innovation—Evidence from China’s Listed Manufacturing Enterprises," Sustainability, MDPI, vol. 15(8), pages 1-23, April.
    15. Yuping Deng & Yanrui Wu & Helian Xu, 2022. "Emission Reduction and Value-added Export Nexus at Firm Level," Economics Discussion / Working Papers 22-19, The University of Western Australia, Department of Economics.
    16. Guo, Dongmei & Li, Qin & Liu, Peng & Shi, Xunpeng & Yu, Jian, 2023. "Power shortage and firm performance: Evidence from a Chinese city power shortage index," Energy Economics, Elsevier, vol. 119(C).
    17. Ullah, Irfan & Jebran, Khalil & Umar, Muhammad & Bin Yousaf, Umair, 2023. "Chief executive officer trustworthiness and green innovation," Research in International Business and Finance, Elsevier, vol. 64(C).
    18. Li, Chengming & Huo, Peng & Wang, Zeyu & Zhang, Weiguang & Liang, Feiyan & Mardani, Abbas, 2023. "Digitalization generates equality? Enterprises’ digital transformation, financing constraints, and labor share in China," Journal of Business Research, Elsevier, vol. 163(C).
    19. Yu, Jian & Liu, Peng & Fu, Dahai & Shi, Xunpeng, 2023. "How do power shortages affect CO2 emission intensity? Firm-level evidence from China," Energy, Elsevier, vol. 282(C).
    20. David Hanrahan, 2021. "Digitalization as a Determinant of Tax Revenues in OECD Countries: A Static and Dynamic Panel Data Analysis," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 7(4), pages 321-348, October.

    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:proeco:v:259:y:2023:i:c:s0925527323000543. 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/ijpe .

    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.