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Enterprise digitalization, organizational slack, and green innovation

Author

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  • Liu, Min
  • Huang, Xiang
  • Wang, Peicheng
  • Liao, Yuting

Abstract

Enterprise green innovation demands substantial resource investments, digitalization emerges as a pivotal enabler that reconfigures organizational resource allocation to drive sustainable innovation. Leveraging panel data from Chinese A-share listed companies (2013–2023), this study empirically investigates how digitalization synergizes with organizational slack to enhance green innovation, testing whether it achieves dual economic-environmental gains within a sustainable development framework. Key findings reveal that: Enterprise digitalization significantly boosts both the quantity and quality of green innovation, optimizing resource utilization efficiency while reducing environmental footprints, thereby aligning with core sustainable development goals; Mechanism analysis demonstrates that digitalization augments resource flexibility and adaptability, with absorbed slack and unabsorbed slack serving as critical mediators to amplify green innovation capacity; Heterogeneity tests indicate stronger effects among firms with high environmental protection investments, pollution-intensive industries, and state-owned enterprises (SOEs). This research provides novel empirical evidence on the digital-green innovation nexus, offering strategic insights for optimizing organizational resources and aligning innovation allocation with sustainable development imperatives.

Suggested Citation

  • Liu, Min & Huang, Xiang & Wang, Peicheng & Liao, Yuting, 2025. "Enterprise digitalization, organizational slack, and green innovation," International Review of Economics & Finance, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025006069
    DOI: 10.1016/j.iref.2025.104443
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