Impact of the Degree of Digital Transformation on Sustainability Innovation from a Dual Perspective

Abstract

Digital transformation is a critical tool driving enterprises’ innovation capabilities. This study investigates the nexus between the degree of digital transformation and sustainable innovation from dual perspective. It selects 805 listed manufacturing enterprises on the A-share from 2012 to 2021, categorizes sustainability innovation into exploitative sustainability and exploratory sustainability innovations, and empirically examines the impact of digital transformation on these innovation types. The results indicate that the effects of digital transformation on these two sustainability innovation types are significant, showing an inverted U-shaped relationship. The findings hold after robustness testing. Additionally, external resource acquisition and knowledge absorption abilities play an important role in the influence of digital transformation on the two sustainability innovation types. Further analysis reveals the differential moderating effects of the nature of firm ownership and regional resource differences between the east and the west on the above relationships. State-owned enterprises (SOEs), depending on policy support and resource scale advantages, are more strongly facilitated by digital transformation for exploitative sustainable innovation, while non-SOEs are more effective in driving exploratory sustainable innovation through flexible knowledge absorption mechanisms. The marginal effect of digital transformation on sustainable innovation tends to be significantly better in eastern than in western regions owing to the advanced degree of marketization and improved digital infrastructures.