How Does Digital–Physical Technological Integration Drive Corporate Green Innovation? The Role of Knowledge Integration Capability
TL;DR
The empirical evidence shows that firms with a higher degree of digital–physical technological integration tend to generate more green innovation outputs and achieve higher green innovation quality.
Abstract
As interactions between digital and physical technologies intensify, understanding their implications for corporate green innovation has become increasingly important. Using panel data on Chinese A-share listed firms from 2008 to 2024, this study investigates the relationship between digital–physical technological integration and both the quantity and quality of green innovation while considering potential endogeneity concerns. The empirical evidence shows that firms with a higher degree of digital–physical technological integration tend to generate more green innovation outputs and achieve higher green innovation quality. Additional analyses show that digital–physical technological integration is positively associated with knowledge depth, knowledge breadth, receipt of general government support, and environmental information disclosure quality, providing evidence consistent with the proposed knowledge, resource, and information explanations. Heterogeneity analysis reveals that the relationship is more pronounced for digital product manufacturing and digital technology applications, and among larger, more mature, and less financially constrained firms. At the regional level, the relationship is stronger in regions with more advanced digital infrastructure, stronger intellectual property protection, and a more favourable business environment. This study advances current understanding of the relationship between digitalisation and green innovation and offers implications for designing differentiated innovation policies across firms and regions.