IDEAS home Printed from https://ideas.repec.org/a/spr/annopr/v350y2025i3d10.1007_s10479-025-06642-4.html
   My bibliography  Save this article

Technology choices for polluting firms in China: the synergy between digital transformation and green transformation

Author

Listed:
  • Qianxiang Zhang

    (Xiamen University)

  • Boqiang Lin

    (Xiamen University
    City University of Macau)

Abstract

Optimizing technology management for polluting firms is crucial for pollution control and climate change mitigation. In contrast to the extensive research on green innovation, technical renovation has often been overlooked, and the influence of digital technology remains ambiguous. Using a dataset of Chinese polluting industries, we employ the panel fixed effect model. Our findings are as follows: (1) When confronted with local environmental governance pressure, firms tend to rely more on technical renovation. Nevertheless, small-scale firms and those located in the eastern provinces demonstrate a markedly weaker response; (2) In exploring the underlying causes, we find that local environmental governance pressure exacerbates the financing constraints of small-scale firms. For firms in the eastern provinces, empirical evidence suggests that they have embarked on the path of independent innovation by accumulating the achievements of technical renovation; (3) Further analysis reveals a synergistic effect between digital transformation and green transformation, which implies that the integration of digital technologies can accelerate the green transformation process of polluting firms. Our findings provide targeted policy implications for optimizing technology management for polluting firms.

Suggested Citation

  • Qianxiang Zhang & Boqiang Lin, 2025. "Technology choices for polluting firms in China: the synergy between digital transformation and green transformation," Annals of Operations Research, Springer, vol. 350(3), pages 1363-1383, July.
    • Handle: RePEc:spr:annopr:v:350:y:2025:i:3:d:10.1007_s10479-025-06642-4
    DOI: 10.1007/s10479-025-06642-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10479-025-06642-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10479-025-06642-4?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.

    References listed on IDEAS

    as
    1. Minetti, Raoul & Murro, Pierluigi & Paiella, Monica, 2015. "Ownership structure, governance, and innovation," European Economic Review, Elsevier, vol. 80(C), pages 165-193.
    2. Paul Lanoie & Jérémy Laurent‐Lucchetti & Nick Johnstone & Stefan Ambec, 2011. "Environmental Policy, Innovation and Performance: New Insights on the Porter Hypothesis," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(3), pages 803-842, September.
    3. Sun, Chuanwang & Yi, Xiangyu & Ma, Tiemeng & Cai, Weiyi & Wang, Wei, 2022. "Evaluating the optimal air pollution reduction rate: Evidence from the transmission mechanism of air pollution effects on public subjective well-being," Energy Policy, Elsevier, vol. 161(C).
    4. Hongbo Duan, Lei Zhu, Gürkan Kumbaroglu, and Ying Fan, 2016. "Regional Opportunities for China To Go Low-Carbon: Results from the REEC Model," The Energy Journal, International Association for Energy Economics, vol. 0(China Spe).
    5. Chiara Franco & Giovanni Marin, 2017. "The Effect of Within-Sector, Upstream and Downstream Environmental Taxes on Innovation and Productivity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(2), pages 261-291, February.
    6. Danish, & Khan, Salahuddin & Haneklaus, Nils, 2023. "Sustainable economic development across globe: The dynamics between technology, digital trade and economic performance," Technology in Society, Elsevier, vol. 72(C).
    7. Andrew B. Bernard & Stephen J. Redding & Peter K. Schott, 2010. "Multiple-Product Firms and Product Switching," American Economic Review, American Economic Association, vol. 100(1), pages 70-97, March.
    8. Hongbo Duan & Lei Zhu & Gürkan Kumbaroğlu & Ying Fan, 2016. "Regional Opportunities for China to Go Low-Carbon: Results from the REEC Model," The Energy Journal, , vol. 37(1_suppl), pages 223-252, January.
    9. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    10. Stucki, Tobias & Woerter, Martin & Arvanitis, Spyros & Peneder, Michael & Rammer, Christian, 2018. "How different policy instruments affect green product innovation: A differentiated perspective," Energy Policy, Elsevier, vol. 114(C), pages 245-261.
    11. Chen, Zhao & Kahn, Matthew E. & Liu, Yu & Wang, Zhi, 2018. "The consequences of spatially differentiated water pollution regulation in China," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 468-485.
    12. de Miguel, Carlos & Pazó, Consuelo, 2017. "Environmental protection, innovation and price-setting behavior in Spanish manufacturing firms," Energy Economics, Elsevier, vol. 68(S1), pages 116-124.
    13. Yang, Mian & Ma, Tiemeng & Sun, Chuanwang, 2018. "Evaluating the impact of urban traffic investment on SO2 emissions in China cities," Energy Policy, Elsevier, vol. 113(C), pages 20-27.
    14. Cui, Lianbiao & Li, Rongjing & Song, Malin & Zhu, Lei, 2019. "Can China achieve its 2030 energy development targets by fulfilling carbon intensity reduction commitments?," Energy Economics, Elsevier, vol. 83(C), pages 61-73.
    15. Virgiliu Midrigan & Daniel Yi Xu, 2014. "Finance and Misallocation: Evidence from Plant-Level Data," American Economic Review, American Economic Association, vol. 104(2), pages 422-458, February.
    16. Wang, Chunhua & Wu, JunJie & Zhang, Bing, 2018. "Environmental regulation, emissions and productivity: Evidence from Chinese COD-emitting manufacturers," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 54-73.
    17. Albrizio, Silvia & Kozluk, Tomasz & Zipperer, Vera, 2017. "Environmental policies and productivity growth: Evidence across industries and firms," Journal of Environmental Economics and Management, Elsevier, vol. 81(C), pages 209-226.
    18. Wang, Qian & Wong, T.J. & Xia, Lijun, 2008. "State ownership, the institutional environment, and auditor choice: Evidence from China," Journal of Accounting and Economics, Elsevier, vol. 46(1), pages 112-134, September.
    19. Ouyang, Xiaoling & Chen, Jiaqi & Du, Kerui, 2021. "Energy efficiency performance of the industrial sector: From the perspective of technological gap in different regions in China," Energy, Elsevier, vol. 214(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. Zhang, Yijun & Li, Xiaoping & Song, Yi & Jiang, Feitao, 2021. "Can green industrial policy improve total factor productivity? Firm-level evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 51-62.
    2. Chen, Ying & Wu, Wenjie & Yun, Yanwen, 2025. "The geography of pollution regulation and productivity," Journal of Environmental Economics and Management, Elsevier, vol. 131(C).
    3. Li, Xinze & Du, Kerui & Ouyang, Xiaoling & Liu, Lili, 2022. "Does more stringent environmental regulation induce firms' innovation? Evidence from the 11th Five-year plan in China," Energy Economics, Elsevier, vol. 112(C).
    4. Abdulla, Eman & Lim, King Yoong & Morris, Diego & Saliba, Faten, 2022. "Climate Change, Gender Equality, and Firm-Level Innovation : Cross-Country Evidence," The Warwick Economics Research Paper Series (TWERPS) 1429, University of Warwick, Department of Economics.
    5. Yuan, Kaihua & Cui, Jingyuan & Zhang, Haipeng & Gao, Xiang, 2023. "Do cleaner production standards upgrade the global value chain position of manufacturing enterprises? Empirical evidence from China," Energy Economics, Elsevier, vol. 128(C).
    6. Zhang, Yongji & Lan, Minghui & Zhao, Yapu & Su, Zhi & Hao, Yu & Du, Heran, 2024. "Regional carbon emission pressure and corporate green innovation," Applied Energy, Elsevier, vol. 360(C).
    7. Xinghua Wang & Shunchen Wu & Xiaojuan Qin & Meixiang La & Haixia Zuo, 2022. "Informal Environment Regulation, Green Technology Innovation and Air Pollution: Quasi-Natural Experiments from Prefectural Cities in China," Sustainability, MDPI, vol. 14(10), pages 1-13, May.
    8. Zhang, Yijun & Song, Yi, 2022. "Tax rebates, technological innovation and sustainable development: Evidence from Chinese micro-level data," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    9. Fan, Jianshuang & Liu, Dongtao & Zhou, Lin & Ding, Liang & Zhang, Junshen, 2025. "Environmental regulation, resource dependence, and innovation and entrepreneurship vitality of Chinese cites," Resources Policy, Elsevier, vol. 101(C).
    10. Chen, Shiyi & Song, Hong & Wu, Chenyu, 2021. "Human capital investment and firms’ industrial emissions: Evidence and mechanism," Journal of Economic Behavior & Organization, Elsevier, vol. 182(C), pages 162-184.
    11. Weihao Zhang & Helian Xu & Yuanyuan Xu, 2023. "Does Stronger Environmental Regulation Promote Firms’ Export Sophistication? A Quasi-Natural Experiment Based on Sewage Charges Standard Reform in China," Sustainability, MDPI, vol. 15(11), pages 1-17, June.
    12. Xuesong Gu & Xiaoran An & Andong Liu, 2022. "Environmental Regulation, Corporate Economic Performance and Spatial Technology Spillover: Evidence from China’s Heavily Polluting Listed Corporations," IJERPH, MDPI, vol. 19(3), pages 1-24, January.
    13. Yan, Zheming & Yu, Ying & Du, Kerui & Zhang, Ning, 2024. "How does environmental regulation promote green technology innovation? Evidence from China's total emission control policy," Ecological Economics, Elsevier, vol. 219(C).
    14. Satoshi Honma & Jin-Li Hu, 2024. "How Does Environmental Policy Stringency Affect Inefficiency of Firms? New Evidence from International Firm-Level Data," Circular Economy and Sustainability, Springer, vol. 4(2), pages 1539-1558, June.
    15. Yuping Deng & Yanrui Wu & Helian Xu, 2019. "Environmental Regulation and Export Product Quality: Evidence from Chinese Firms," Economics Discussion / Working Papers 19-14, The University of Western Australia, Department of Economics.
    16. Davide Antonioli & Grazia Cecere & Massimiliano Mazzanti, 2018. "Information communication technologies and environmental innovations in firms: joint adoptions and productivity effects," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 61(11), pages 1905-1933, September.
    17. Du, Xuewen, 2023. "Can environmental regulation promote high-quality economic development?: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1762-1771.
    18. Gangqiang Yang & Ziyu Ding & Haisen Wang & Lingli Zou, 2023. "Can environmental regulation improve firm total factor productivity? The mediating effects of credit resource allocation," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(7), pages 6799-6827, July.
    19. Mian Yang & Yining Yuan & Fuxia Yang & Dalia Patino-Echeverri, 2021. "Effects of environmental regulation on firm entry and exit and China’s industrial productivity: a new perspective on the Porter Hypothesis," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 23(4), pages 915-944, October.
    20. Erik Hille & Patrick Möbius, 2019. "Environmental Policy, Innovation, and Productivity Growth: Controlling the Effects of Regulation and Endogeneity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 1315-1355, August.

    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:spr:annopr:v:350:y:2025:i:3:d:10.1007_s10479-025-06642-4. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.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.