Green innovation is an important strategy in seeking sustainable competitive advantages. This paper investigates the impact of enterprise digitization on green innovation and its mechanisms. We find that enterprise digital transformation has a significant effect on the promotion of green innovation. This positive effect mainly stems from the advantage of resource reallocation generated by enterprise digitalization that can alleviate financing constraints and raise risk-taking levels. Furthermore, the level of economic development strengthens the impact of enterprise digitization on green innovation, and the positive relationship between enterprise digitization and green innovation is stronger in regions with stronger environmental regulation and higher intellectual property protection, as well as in state-owned and heavily polluting enterprises. Digitization can optimize resource utilization, strengthen the capacity of green innovation in pollution reduction and promote the clean production of enterprises. Our results show that enterprise digitization plays a positive role in innovation activities. Furthermore, our results show that enterprise digitization plays a positive role in innovation activities.

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In recent years, the Audit Pilot of Natural Resources Assets (APNRA) pilot program has been implemented by the Chinese government to strengthen the protection of natural resources and the ecological environment. Based on the APNRA pilot program, we use the multi-period differences-in-differences model to investigate the response of corporate environmental responsibility to external governance pressure. We find that firms significantly improve their environmental investment and performance after the implementation of the APNRA pilot program. Sewage charges (including green fees) and ecological protection incentives constitute the two main channels that explain the positive relationship. We further find that the impact of the program on corporate environmental investment and performance is more pronounced for firms in regions with poor environmental quality, and for firms in heavy-polluting industries. This paper introduces the role of government governance in generating positive externality for firms and provides a valuable understanding of environmental governance in an emerging market.