Digital transformation and corporate green innovation: An affordance theory perspective

Zhe Sun, Liang Zhao, Ankit Mehrotra, Muhammad Asif Salam and Muhammad Zafar Yaqub

Business Strategy and the Environment, 2025, vol. 34, issue 1, 433-449

Abstract: The rise of cutting‐edge technologies motivates corporations to undertake and carry forward green innovation, aiding economic development by maintaining environmental sustainability. Using A‐share listed firms from 2013 to 2022 as the research sample, the paper empirically examines the impact of digital transformation on corporate green innovation from an affordance perspective. The findings suggest that the higher the level of digital transformation, backed by accumulative and variational affordances, in a firm, the more conducive it is to corporate green innovation as it enables the homogenization, recombination, and transformation of existing information related to green environmental protection and low‐carbon energy efficiency, facilitating firms to achieve targeted and breakthrough green innovations. The analysis of the moderating effects of public environmental concern, economic policy uncertainty, and regional innovation readiness suggested that public environmental concern and regional innovation readiness positively moderate the relationship between digital transformation and corporate green innovation, while economic policy uncertainty perception negatively moderates this relationship. Heterogeneity analyses suggest that digital transformation positively affects corporate green innovation within labor‐intensive firms and state‐owned enterprises. The study contributes to the literature by enhancing our understanding of the affordance theory in the domain of digital transformation. By investigating the key organizational and institutional affordances – economic policy uncertainty perception, public environmental concern, and regional innovation readiness – the research provides valuable insight to policymakers in fostering green innovation.

Date: 2025
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