Impact of digital transformation on green production: Evidence from China

In the global context of development transformation, digital transformation (DT) has emerged as a prevalent practice among international corporations, facilitating the simultaneous enhancement of economic growth. However, limited research on how digital transformation affects green production, especially at a micro level, poses risks by impeding the understanding of strategies for balancing economic growth and environmental sustainability. This study addresses a critical research gap by elucidating the influence of digitization on green total factor productivity (GTFP). We based our findings on a sample of 280 listed non-financial firms from 2007 to 2021 and computed core variables through text analysis and the super-SBM model. The data analysis using fixed effects models, correlation analysis, instrumental variable approach, and difference-in-differences method. The findings underscore the positive impact of DT on enhancing firms' green innovation, investment efficiency, and internal control, consequently significantly elevating the level of GTFP. Additionally, it was observed that normal DT contributes to the sustainable long-term improvement of a firm's GTFP, whereas excessive DT exhibits a positive impact on short-term GTFP. This study's insights into the positive impact of DT on GTFP serve to guide enterprises and policymakers in navigating a transition towards high-quality development, facilitating a balanced approach that fosters environmental conservation alongside economic growth in both emerging and global contexts.