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Does the firms' digital transformation drive environmental innovation in China?

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  • Yunqing Tao
  • Huishan Lu
  • Yongwei Ye
  • Haitao Wu

Abstract

Environmental innovation is an important practical exploration for enterprises to realize a win‐win situation between economic and environmental benefits. In order to explore the environmental innovation effect of enterprise digital transformation, we empirically examine the impact of enterprise digital transformation on environmental innovation based on the micro data of listed enterprises from 2009 to 2020. We find that enterprise digital transformation has a significantly positive effect on environmental innovation, and our finding still holds after considering various robustness tests. The mechanism test indicates that alleviating financing constraints and improving human capital structure serve as critical channels. In addition, the impact of firms' digital transformation on environmental innovation shows some variability with geographic location, industry factor intensity, and pollution level. Our findings provide new insights and policy implications for enterprises to balance development efficiency and environmental innovation.

Suggested Citation

  • Yunqing Tao & Huishan Lu & Yongwei Ye & Haitao Wu, 2024. "Does the firms' digital transformation drive environmental innovation in China?," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(3), pages 2139-2152, June.
    • Handle: RePEc:wly:sustdv:v:32:y:2024:i:3:p:2139-2152
    DOI: 10.1002/sd.2769
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    1. Chen, Kaixuan & Zhang, Shushan, 2024. "How does open public data impact enterprise digital transformation?," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 178-190.

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