IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v109y2026ics1059056026005332.html

From enablement to entrapment: The inverted U-shaped effect of over-digitalization on green innovation

Author

Listed:
  • Zhao, Wenli
  • Ren, Liuyang

Abstract

This study explores when digital transformation evolves from an enabling force into a constraint on firms’ green innovation. Drawing on resource orchestration theory, we conceptualize over-digitalization as a structural imbalance between technological intensity and organizational capacity. Using panel data on Chinese A-share listed firms (2001–2023), we find an inverted U-shaped relationship between over-digitalization and green innovation performance. Moderate levels of digitalization enhance flexibility and coordination, but excessive investment undermines absorptive capacity and reduces innovation efficiency. Government subsidies can cushion the negative effects, while managerial discretion intensifies both benefits and drawbacks. State-owned enterprises exhibit weaker declines due to institutional slack and compliance-oriented governance. These findings advance the digitalization-sustainability literature by identifying over-digitalization as a distinct organizational phenomenon and by revealing the nonlinear and context-dependent nature of digital transformation’s impact on green innovation.

Suggested Citation

  • Zhao, Wenli & Ren, Liuyang, 2026. "From enablement to entrapment: The inverted U-shaped effect of over-digitalization on green innovation," International Review of Economics & Finance, Elsevier, vol. 109(C).
    • Handle: RePEc:eee:reveco:v:109:y:2026:i:c:s1059056026005332
    DOI: 10.1016/j.iref.2026.105420
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056026005332
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2026.105420?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

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    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:reveco:v:109:y:2026:i:c:s1059056026005332. 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.

    We have no bibliographic references for this item. You can help adding them by using 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/inca/620165 .

    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.