Digital capability, green orientation and innovation activities: evidence from firms in an emerging market

Abstract

This study aims to examine how digital capability and green orientation shape firms’ innovation activities and objective innovation performance in an emerging-market context, and how export participation asymmetrically conditions these capability-conversion pathways. Drawing on dynamic capabilities theory and sustainability-oriented innovation research, the study analyzes survey data from 1,158 Vietnamese firms using PLS-SEM, multigroup analysis and robustness checks. Digital capability and green orientation both positively predict innovation activities, which in turn are associated with objective innovation performance. The two antecedents operate through different mechanisms: digital capability is more performance-proximate, whereas green orientation primarily stimulates innovation engagement without a direct performance association. Evidence for digital–green complementarity is weak and should be interpreted as limited conditional reinforcement rather than strong synergy. The central finding is that export participation acts as an asymmetric boundary condition, strengthening the digital capability–innovation activities relationship while weakening the green orientation–innovation activities relationship. Cross-sectional, single-country, single-informant data limit causal inference and generalizability. The measures should be interpreted as focused survey-based proxies rather than exhaustive construct representations. The findings clarify why digital and green antecedents should not be treated as equivalent strategic drivers and highlight export exposure as a key condition shaping their conversion into innovation-related action. Managers should invest in digital upgrading to support innovation, especially in export markets, while ensuring that environmental commitments are translated into concrete innovation actions rather than compliance-oriented activities alone. The study advances a differentiated capability-conversion perspective by showing that export participation reveals asymmetric digital and green pathways from strategic antecedents to innovation activities, while also demonstrating the limits of assumed digital–green complementarity in an emerging-market setting.