How digital government mediate the influence of fossil fuels on green innovation: Evidence from China's a-share industrial enterprises

Abstract

China's rapid economic growth has resulted in a heavy reliance on fossil fuels, necessitating effective government intervention to facilitate their green transformation within the industrial sector. Therefore, a comprehensive investigation into the impact of mineral resource and fossil fuel dependence (ED) on the green transformation of Chinese enterprises, alongside the role of digital governance systems, holds paramount importance. This study delves into the influence of ED on firms' green technology innovation (FGI) using data sourced from A-share industrial enterprises listed on China's Shanghai and Shenzhen stock exchanges during the period from 2011 to 2021. Additionally, it examines the internal mechanisms facilitated by digital government, and provides insights into the heterogeneity observed from the perspectives of enterprises' industry classifications and sizes. The following conclusions are drawn: (1) ED significantly impedes the enhancement of green technology innovation levels among listed industrial enterprises, and this finding remains robust across multiple testing methods. (2) ED demonstrates varying inhibitory effects on firms' green technology innovation, with the most pronounced impact observed in the energy production and supply industry and the mining industry, and a relatively weaker effect observed in manufacturing enterprises. Furthermore, the inhibitory effect of fossil energy dependence on green technology innovation is observed to be stronger in small-scale enterprises compared to their larger counterparts. (3) The advancement of the digital economy notably mitigates the inhibitory effect of fossil energy dependence on firms' green technology innovation. (4) ED primarily diminishes the level of green innovation by reducing the stringency of government environmental regulations, hindering regional marketization, and impeding the industrial structure's upgrade.