Digital Transformation and Sustainable Competitiveness: The ESG–Green Technology Innovation Pathway and the Moderating Role of Income Tax Burden

Abstract

As firms increasingly face sustainability pressures and digital disruption, understanding how digital transformation contributes to long-term competitiveness has become an important research and managerial challenge. However, the mechanisms through which digital transformation enhances sustainable competitiveness remain insufficiently understood, particularly in emerging economies undergoing sustainability transitions. This study develops and empirically tests a sequential sustainability transformation framework by examining the mediating roles of ESG performance and green technology innovation in the relationship between digital transformation and sustainable competitiveness, while also investigating the moderating role of income tax burden. Using panel data from 131 firms listed on the Stock Exchange of Thailand over the period 2021–2024, the study employs panel-data regression models, sequential mediation analysis, and moderation analysis to test the proposed framework. The findings indicate that the relationship between digital transformation and sustainable competitiveness operates primarily through ESG performance and green technology innovation rather than through a direct technological pathway. ESG performance serves as an important intermediary mechanism, while green technology innovation translates sustainability-oriented capabilities into competitive outcomes. The results further reveal that income tax burden positively moderates the relationship between digital transformation and green technology innovation, indicating that this positive relationship becomes stronger under higher levels of income tax burden. This study contributes to the literature by clarifying the sequential organizational mechanisms through which digital transformation is translated into sustainable competitiveness and by identifying income tax burden as a relevant financial boundary condition. The findings provide evidence that sustainable competitiveness is supported by complementary organizational mechanisms rather than technology adoption alone, while also highlighting the role of financial conditions in shaping sustainability-oriented innovation. The findings provide practical guidance for managers and policymakers seeking to integrate digital transformation, ESG-related governance, and green technology innovation to strengthen sustainable competitiveness in emerging economies.