Abstract
This study examined the impact of corporate digitalization on green innovation using data concerning A-share companies listed on the Shanghai and Shenzhen stock markets from 2012 to 2018. We measured the degree of corporate digitalization through a text analysis of annual reports and empirically tested its impact on green innovation using a panel data fixed effects model. We found that digital transformation can improve green innovation levels, especially when internal control is weak and institutional ownership is low. These findings support the theoretical expectation that digitalization can strengthen supervision. The relationship between digitization and corporate governance mechanisms was proved to be complementary. Additionally, the analysis of economic consequences showed that digitalization improves financial performance by promoting green innovation. The results clarify the determinants of corporate green innovation and provide relevant insights for increasing the value of corporate digital transformation.
Highlights
In recent decades, environmental problems caused by global warming have worsened, and the relationship between human beings and the natural environment has become one of the foremost global issues
Based on the literature [1,3,50], we introduced a series of control variables to control for other economic characteristics affecting corporate green innovation, including firm size (SIZE), financial leverage (LEV), company performance (ROA), growth rate (GROWTH), largest ownership (SHR1), managerial ownership (MSHARE), CEO duality (Dual), ownership (SOE), cash flow (CASH), and intensity of physical assets (PPE)
The results of our analysis show that digital transformation significantly improves the level of corporate green innovation and that the impact of digitalization on green innovation is more obvious in terms of poor internal control quality and low ownership of institutional investors
Summary
Environmental problems caused by global warming have worsened, and the relationship between human beings and the natural environment has become one of the foremost global issues. This study examined the impact of corporate digitalization on environmental sustainability from the perspective of green innovation. In China, digital technology has the potential to be applied in corporate green innovation Based on this theoretical and practical background, we selected Chinese-listed companies as a sample and used a panel data fixed effects regression model to investigate the impact of digital transformation on green innovation and to add to existing research and provide managers guidelines for enterprises when implementing digital management and pursuing the related green advantages. Our study explored the positive role of digitalization in enhancing corporate environmental sustainability from the perspective of green innovation, providing new ideas for studying the impact of digitalization on corporate social responsibility behavior and providing reference for making full use of the environmental benefit potential of the digital economy, as only when the digital economy is combined with the real economy will it not lead to a bubble. The remainder of this paper is organized as follows: Section 2 reviews the literature on digitalization and corporate green innovation; Section 3 presents our hypotheses; Section 4 describes the research design; Section 5 presents the results; Section 6 discusses the results; and Section 7 concludes the paper
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