Strategic Imperatives of ESG in Fostering Corporate Digital Innovation: a Resource-Based View

Xuetong Wang (), Ming Yuan (), Xuekun Suo (), Mingchuan Yu (), Penghao Huang () and Han Lin ()
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Xuetong Wang: Guangzhou University
Ming Yuan: Guangzhou University
Xuekun Suo: Ningbo University of Finance and Economics
Mingchuan Yu: Ningbo University of Finance and Economics
Penghao Huang: The University of Sydney
Han Lin: Hohai University

Journal of the Knowledge Economy, 2025, vol. 16, issue 4, No 52, 15286-15315

Abstract: Abstract Digital innovation has become a critical force in reshaping the global competitive landscape, driving corporations to adapt to an increasingly dynamic and strategically demanding environment. Given the growing importance of digital innovation, understanding how to enhance it is crucial for maintaining corporate competitiveness. Using empirical research based on data from Chinese firms (2010–2021) and grounded in a resource-based view, this study investigates the link between ESG practices and digital innovation. Findings reveal that (1) better ESG lays the foundation for better digital innovation; (2) proactive ESG engagement facilitates the mitigation of financing constraints, providing increased financial support for sustaining long-term corporate digital innovation; and (3) the richness of ESG equip corporations with a multidimensional approach to learning, augmenting their absorptive capacity and enabling them to maintain competitiveness in the digital innovation race. This research underscores the importance of non-financial resources, offering valuable theoretical insights for corporations and societal stakeholders aiming to effectively elevate digital innovation levels, and furnishes actionable information for managerial implications.

Keywords: Digital innovation; Environmental; social; and governance (ESG); Financing constraints; Absorptive capacity; Resource-based view (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s13132-024-02542-3

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