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Digital technologies and eco-innovation. Evidence of the twin transition from Italian firms

Author

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  • Sandro Montresor
  • Antonio Vezzani

Abstract

This paper investigates how the twin transition (digital & green) unfolds within firms by relating investments in digital technologies to the propensity of eco-innovating production processes and models. Drawing on a heterogeneous theoretical background, digital technologies can be hypothesised to enable eco-innovation across the board. However, a greater eco-innovation impact is expected from Artificial Intelligence and from bundling digital investments. Using the new Permanent Census of Firms of the Italian National Statistical Office, these hypotheses are tested on a large sample of more than 150,000 firms. Results confirm that the contribution of digital technologies to a firm’s eco-innovation is mainly driven by investments in AI application areas, while investments in other digital technologies work more selectively. Moreover, new eco-innovative production processes and models benefit from bundling investments in different digital technologies, but with differences among firms of different size.

Suggested Citation

  • Sandro Montresor & Antonio Vezzani, 2023. "Digital technologies and eco-innovation. Evidence of the twin transition from Italian firms," Industry and Innovation, Taylor & Francis Journals, vol. 30(7), pages 766-800, August.
    • Handle: RePEc:taf:indinn:v:30:y:2023:i:7:p:766-800
    DOI: 10.1080/13662716.2023.2213179
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    1. Tabares, Sabrina & Parida, Vinit & Chirumalla, Koteshwar, 2025. "Twin transition in industrial organizations: Conceptualization, implementation framework, and research agenda," Technological Forecasting and Social Change, Elsevier, vol. 213(C).
    2. Jérôme Hambye-Verbrugghen & Stefano Bianchini & Paul E Brockway & Emmanuel Aramendia & Matthew K Heun & Zeke Marshall, 2025. "From twin transition to twice the burden? Digitalisation, energy demand, and economic growth," Post-Print hal-05460038, HAL.
    3. Nelli, Linnea & Virgillito, Maria Enrica & Vivarelli, Marco, 2025. "A Twin Transition or a Policy Flagship? Emergent Constellations and Dominant Blocks in Green and Digital Technologies," IZA Discussion Papers 17779, IZA Network @ LISER.
    4. Benedetta Montanaro & Annalisa Croce & Elisa Ughetto, 2024. "Venture capital investments in artificial intelligence," Journal of Evolutionary Economics, Springer, vol. 34(1), pages 1-28, January.
    5. Xiao, Yao & Xiang, Rong & Sun, Yong-lei & Chen, Jin & Hao, Yun-hong, 2025. "Digital disruption, knowledge and collaborative networks and green innovation in China manufacturing transformation," Technological Forecasting and Social Change, Elsevier, vol. 216(C).
    6. Hambye-Verbrugghen, Jérôme & Bianchini, Stefano & Brockway, Paul E. & Aramendia, Emmanuel & Heun, Matthew K. & Marshall, Zeke, 2026. "From twin transition to twice the burden? Digitalisation, energy demand, and economic growth," Ecological Economics, Elsevier, vol. 239(C).
    7. Ning, Xin & Wang, Qinmeng & Wang, Ge & Qin, Liumiao, 2025. "Reciprocity or conflict? The impact of dual-policy of broadband China and low-carbon city on firms’ green technology innovation," Telecommunications Policy, Elsevier, vol. 49(10).
    8. Nelli, Linnea & Virgillito, Maria Enrica & Vivarelli, Marco, 2026. "A twin transition or a flagship policy? Emergent constellations and dominant blocks in green and digital technologies," Energy Policy, Elsevier, vol. 209(PA).
    9. Effie Kesidou & Anastasia Ri & Stephen Roper, 2026. "Balancing act or two roads to travel: Evaluating the trade-offs between digitalization and net zero innovation in SMEs," Small Business Economics, Springer, vol. 66(2), pages 797-826, February.
    10. Graziella Benedetto & Maria Bonaventura Forleo, 2024. "PDO Economy and Quality Agri-Food District in the wine sector: Blockchain and digitalization as tools for the twin transition," Economia agro-alimentare, FrancoAngeli Editore, vol. 2024(3), pages 187-213.
    11. Kalantzis, Fotios & Kesidou, Effie & Ri, Anastasia & Roper, Stephen, 2025. "How does digitalisation support firms' strategies for climate change mitigation and adaptation," EIB Working Papers 2025/04, European Investment Bank (EIB).
    12. Moncef Hammadi & Simon Merschak & Thierno M. L. Diallo & Peter Hehenberger, 2025. "CEF-DPP: A Circular Economy Framework Integrating Digital Product Passport for Improving Circularity of Sustainable Mechatronics Design," Circular Economy and Sustainability, Springer, vol. 5(4), pages 3431-3463, August.
    13. Lu, Shuo & Liu, Jiachuan & Wang, Xi & Zhang, Wenzhong, 2026. "Absorptive capacity and the low-carbon impact of external digital and green technologies," Technology in Society, Elsevier, vol. 84(C).
    14. Abbasiharofteh, Milad & Kriesch, Lukas, 2024. "Not all twins are identical: the digital layer of “twin” transition market applications," Papers in Innovation Studies 2024/16, Lund University, CIRCLE - Centre for Innovation Research.
    15. Gianluca Biggi & Martina Iori & Julia Mazzei & Andrea Mina, 2025. "Green intelligence: the AI content of green technologies," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 15(3), pages 803-840, September.
    16. Prakhar Prakhar & Rachana Jaiswal & Shashank Gupta & Syed Zamberi Ahmad & Patrice Piccardi & Gabriele Santoro, 2025. "How can we improve entrepreneurial dynamics in electric vehicle manufacturing for a sustainable future: insights using a deep learning-based hybrid PLS-SEM-ANN approach," International Entrepreneurship and Management Journal, Springer, vol. 21(1), pages 1-45, December.
    17. Torrent-Sellens, Joan & Enache-Zegheru, Mihaela & Ficapal-Cusí, Pilar, 2025. "Twin transitions or a meeting of strangers? Unravelling the effects of AI and innovations on economic, social and environmental MSMEs sustainability," Technology in Society, Elsevier, vol. 81(C).
    18. Benedetti, Ilaria & Guarini, Giulio & Laureti, Tiziana, 2023. "Digitalization in Europe: A potential driver of energy efficiency for the twin transition policy strategy," Socio-Economic Planning Sciences, Elsevier, vol. 89(C).
    19. Usman, Muhammad & Simionescu, Mihaela & Radulescu, Magdalena & Balsalobre-Lorente, Daniel, 2024. "Breaking barriers, cultivating sustainability: Discovering the trifecta influence of digitalization, natural resources, and globalization on eco-innovations across 27 European nations," Resources Policy, Elsevier, vol. 94(C).
    20. Xie, Xiaoyu & Guo, Kaige & Han, Zhongya, 2025. "Digital technology application and green technological innovation under economic policy uncertainty: Empirical evidence from China's manufacturing industry," International Review of Financial Analysis, Elsevier, vol. 108(PA).
    21. Daniel Coronado & Esther Ferrándiz & Jennifer Medina, 2026. "Knowledge path dependence in energy innovation: the role of spillovers and green absorptive capacity in renewable and non-renewable technology diffusion," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 16(1), pages 255-289, March.
    22. Youngsam Chun & Junseok Hwang, 2025. "The Nexus of Artificial Intelligence and Green Innovation: a Cross-Density Analysis at the Country Level," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(1), pages 1688-1716, March.

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