Can Corporate Digitalization Promote Green Innovation? The Moderating Roles of Internal Control and Institutional Ownership

Dukangqi Li and Weitao Shen
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Dukangqi Li: Department of Business Management, School of Management, Xiamen University, Xiamen 361005, China
Weitao Shen: Department of Business Management, School of Management, Xiamen University, Xiamen 361005, China

Sustainability, 2021, vol. 13, issue 24, 1-22

Abstract: This study examined the impact of corporate digitalization on green innovation using data concerning A-share companies listed on the Shanghai and Shenzhen stock markets from 2012 to 2018. We measured the degree of corporate digitalization through a text analysis of annual reports and empirically tested its impact on green innovation using a panel data fixed effects model. We found that digital transformation can improve green innovation levels, especially when internal control is weak and institutional ownership is low. These findings support the theoretical expectation that digitalization can strengthen supervision. The relationship between digitization and corporate governance mechanisms was proved to be complementary. Additionally, the analysis of economic consequences showed that digitalization improves financial performance by promoting green innovation. The results clarify the determinants of corporate green innovation and provide relevant insights for increasing the value of corporate digital transformation.

Keywords: digitalization; information asymmetry; internal control; institutional ownership; green innovation; financial performance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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