IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i20p9341-d1776190.html

Impacts of Digital Transformation on the Quantity and Quality of Corporate Green Innovation: Evidence from China

Author

Listed:
  • Deshan Li

    (School of Business, Sichuan Normal University, Chengdu 610101, China)

  • Bowen Shu

    (School of Business, Sichuan Normal University, Chengdu 610101, China)

Abstract

Green innovation is a key driver for reshaping the economic development model and attaining sustainable development. Prior research has primarily concentrated on the consequences of digital transformation on the quantity of corporate green innovation, while in-depth investigations into its effects on the quality of green innovation and the underlying mechanisms remain limited. Using data from Chinese A-share listed companies in Shanghai and Shenzhen between 2010 and 2023, this study empirically investigates the effects of digital transformation on both the quantity and quality of corporate green innovation. The results of this research show that, firstly, digital transformation exerts a substantial influence on both categories of green innovation. Second, the mechanism analysis reveals that, on the one hand, digital transformation promotes green innovation by alleviating information asymmetry, thereby effectively improving both its quantity and quality; on the other hand, it facilitates an increase in the quantity of green innovation through resource integration effects, but fails to enhance its quality via this channel. Third, the heterogeneity analysis shows that the positive impacts of digital transformation on the quantity and quality of green innovation are more pronounced in state-owned enterprises, firms located in eastern regions, and high-tech enterprises. This study enhances the research on how digital transformation can augment the quantity and elevate the quality of corporate green innovation, offering a valuable reference for advancing the sustainable development of organizations.

Suggested Citation

  • Deshan Li & Bowen Shu, 2025. "Impacts of Digital Transformation on the Quantity and Quality of Corporate Green Innovation: Evidence from China," Sustainability, MDPI, vol. 17(20), pages 1-20, October.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:20:p:9341-:d:1776190
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/20/9341/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/20/9341/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Zhe Sun & Liang Zhao & Ankit Mehrotra & Muhammad Asif Salam & Muhammad Zafar Yaqub, 2025. "Digital transformation and corporate green innovation: An affordance theory perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 34(1), pages 433-449, January.
    2. 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).
    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. Carmen Elena Stoenoiu & Lorentz Jäntschi, 2024. "Connecting the Computer Skills with General Performance of Companies—An Eastern European Study," Sustainability, MDPI, vol. 16(22), pages 1-25, November.
    5. Thi‐Hong‐Van Hoang & Wojciech Przychodzen & Justyna Przychodzen & Elysé A. Segbotangni, 2020. "Does it pay to be green? A disaggregated analysis of U.S. firms with green patents," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 1331-1361, March.
    6. 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.
    7. Liu, Meihan & Zhao, Jingjie & Liu, Hongtao, 2025. "Digital transformation, employee and executive compensation, and sustained green innovation," International Review of Financial Analysis, Elsevier, vol. 97(C).
    8. Bai, Dongbei & Hu, Jin & Irfan, Muhammad & Hu, Mingjun, 2023. "Unleashing the impact of ecological civilization pilot policies on green technology innovation: Evidence from a novel SC-DID model," Energy Economics, Elsevier, vol. 125(C).
    9. Tang, Maogang & Liu, Yinlin & Hu, Fengxia & Wu, Baijun, 2023. "Effect of digital transformation on enterprises' green innovation: Empirical evidence from listed companies in China," Energy Economics, Elsevier, vol. 128(C).
    Full references (including those not matched with items on IDEAS)

    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. You, Wanhai & You, Bingbing & Guo, Yawei, 2025. "Can big data development drive green technology innovation? The spillover role of supply chain partners," Energy Economics, Elsevier, vol. 150(C).
    2. Ai, Mingye & Yu, Yang & Bu, Yan, 2025. "The impact of digital transformation of resource-based enterprises on green innovation: Mechanism analysis based on TOE framework," Innovation and Green Development, Elsevier, vol. 4(4).
    3. Zhangsheng Liu & Liuqingqing Yang & Liqin Fan, 2021. "Induced Effect of Environmental Regulation on Green Innovation: Evidence from the Increasing-Block Pricing Scheme," IJERPH, MDPI, vol. 18(5), pages 1-15, March.
    4. Francesco Chirico & Kimberly A. Eddleston & Pankaj C. Patel, 2025. "Does it Pay to Patent Green Innovations? Stock Market Reactions to Family and Nonfamily Firms’ Green Patents," Journal of Business Ethics, Springer, vol. 198(4), pages 947-970, May.
    5. Sara De Masi & Agnieszka Słomka‐Gołębiowska & Claudio Becagli & Andrea Paci, 2021. "Toward sustainable corporate behavior: The effect of the critical mass of female directors on environmental, social, and governance disclosure," Business Strategy and the Environment, Wiley Blackwell, vol. 30(4), pages 1865-1878, May.
    6. Shao, Cuiying & Liu, Zhanyu, 2024. "Advancing green innovation through the establishment of data regulatory bodies: Insights from the Big Data Bureau in China," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 308-325.
    7. Jun Dai & Qianyuan Xiao, 2025. "Business Environment Optimization, Digital Transformation, and Enterprises’ Green Innovation," Sustainability, MDPI, vol. 17(5), pages 1-22, February.
    8. 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).
    9. Li, Longda, 2024. "The environmental spillovers of buyers' digital transformation: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 209(C).
    10. Xiaohui Zhan & Xinrong Lian & Shengli Dai, 2025. "Correcting or Concealing? The Impact of Digital Transformation on the Greenwashing Behavior of Heavily Polluting Enterprises," Sustainability, MDPI, vol. 17(1), pages 1-21, January.
    11. Wu, Junfeng & Liu, Baohua & Chang, Samuel & Chan, Kam C., 2022. "Effects of air pollution on accounting conservatism," International Review of Financial Analysis, Elsevier, vol. 84(C).
    12. Ramírez-Orellana, Alicia & Martínez-Victoria, MCarmen & García-Amate, Antonio & Rojo-Ramírez, Alfonso A., 2023. "Is the corporate financial strategy in the oil and gas sector affected by ESG dimensions?," Resources Policy, Elsevier, vol. 81(C).
    13. Christine Reitmaier & Wolfgang Schultze & Ramona Paul & Jennifer Weißinger, 2025. "Does It Pay to Be Green? A Total Quality Perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 34(7), pages 8590-8619, November.
    14. Zhao, Fan & Li, Ruirui & Wu, Ziyin & Ru, Xue, 2025. "Can the integration of digital and real economies stimulate residents' consumption?," International Review of Financial Analysis, Elsevier, vol. 103(C).
    15. Li, Hemei & Liu, Zhenya & Hachard, Virginie, 2024. "Digital transformation driving green innovation: Evidence from Chinese A-Share firms," International Review of Economics & Finance, Elsevier, vol. 95(C).
    16. Valquíria Duarte Vieira Rodrigues & Alcido Elenor Wander & Fabricia da Silva Rosa, 2024. "Indicators to analyze environmental performance and eco-controls for a poultry production chain: a methodological proposal based on the EMA system," Environment Systems and Decisions, Springer, vol. 44(1), pages 145-160, March.
    17. Ammar Ali Gull & Asif Saeed & Muhammad Tahir Suleman & Rizwan Mushtaq, 2022. "Revisiting the association between environmental performance and financial performance: Does the level of environmental orientation matter?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1647-1662, September.
    18. Ge, Tao & Hao, Zixuan & Chen, Yuan & Chen, Zhanbo, 2024. "Energy intensity constraints and corporate investment strategies: Evidence from Chinese listed enterprises," Finance Research Letters, Elsevier, vol. 64(C).
    19. Mazaheri, Maryam & Bonnin Roca, Jaime & Markus, Arjan & Tur, Elena M. & Walrave, Bob, 2024. "Maturity assessment of green patent clusters: Methodological implications," Technological Forecasting and Social Change, Elsevier, vol. 209(C).
    20. Mohy-ud-Din, Kamran, 2024. "ESG reporting, corporate green innovation and interaction role of board diversity: A new insight from US," Innovation and Green Development, Elsevier, vol. 3(4).

    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:gam:jsusta:v:17:y:2025:i:20:p:9341-:d:1776190. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.