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How does digital technology facilitate the green innovation of enterprises? Evidence from China

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  • Peng Yang
  • Weizeng Sun

Abstract

Employing annual reports (2007–2019) of Chinese A-share listed firms, we develop a firm-level digital technology application index using text analysis to investigate the impact of digital technology on an enterprise’s green innovation. The results indicate that, first, the application of digital technology significantly increases the level of green innovation of enterprises and will continue to have a positive impact over the next three years. Second, we demonstrate three mechanisms by which digital technology influences green innovation: namely, alleviating financial constraints, empowering the upgrading of human capital structure, and promoting R&D (research and development) cooperation. Third, we find that enterprises can only promote green innovation by integrating digital technology into their production, operation, and management processes. Furthermore, the positive impact of digital technology on green innovation was predominantly observed in businesses located in regions with a high level of environmental protection awareness and with limited environmental governance capacity.

Suggested Citation

  • Peng Yang & Weizeng Sun, 2023. "How does digital technology facilitate the green innovation of enterprises? Evidence from China," International Review of Applied Economics, Taylor & Francis Journals, vol. 37(5), pages 621-641, September.
    • Handle: RePEc:taf:irapec:v:37:y:2023:i:5:p:621-641
    DOI: 10.1080/02692171.2023.2240262
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    Citations

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    Cited by:

    1. Richa Patel & Kajul Bharti & Dipti Ranjan Mohapatra & Sunil Kumar Yadav, 2026. "Juxtaposing the influence of digitalization and supply chain disruption on green innovation: moderating role of human capital development," International Economics and Economic Policy, Springer, vol. 23(2), pages 1-30, May.
    2. Yang, Peng & Jiao, Yong & Feng, Yiqiang & Mu, Manning, 2026. "Digital economy policies and enterprise digital transformation: A quasi-natural experiment of digital economy pilot zones," Pacific-Basin Finance Journal, Elsevier, vol. 95(C).
    3. Zainab Khalid & Lindu Zhao & Ehsan Elahi & Xiaolin Chang, 2026. "The impact of green management on green innovation in sustainable technology: moderating roles of executive environmental awareness, regulations, and ownership," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 28(4), pages 9961-9987, April.
    4. Tan, Weijie & Zhang, Zihan & Chu, Zhongzhu & Chen, Pengyu, 2024. "Unlocking green potential: The digital government-driven revolution in corporate green innovation," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 60-79.
    5. Jie Wu & Xiaoyu Wang & Jacob Wood, 2025. "Can digital transformation enhance total factor productivity? Evidence from chinese listed manufacturing firms," Journal of Productivity Analysis, Springer, vol. 64(2), pages 113-131, October.

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