Driving Green Innovation Through Digital Transformation: Empirical Insights on Regional Variations

Abstract

This research examines the impact of digital transformation on green innovation across different regions in China, using data from the Shanghai and Shenzhen stock markets from 2007 to 2022. The study reveals that digital transformation significantly enhances green innovation in enterprises, with notable regional disparities. The effects are most pronounced in the economically advanced eastern coastal areas, followed by central regions, while the western regions lag behind. This spatial pattern underscores the importance of tailored policies and strategies to address specific regional barriers and opportunities. Integrating digital technologies such as AI and big data has empowered companies to enhance their innovation activities, particularly in energy efficiency, pollution mitigation, and eco-friendly manufacturing. However, challenges such as lack of motivation for innovation and inadequate greener technologies persist, necessitating new strategies to revive eco-friendly innovations. This research provides valuable insights for policymakers, highlighting the need for regional cooperation, knowledge sharing, and technology transfer to promote sustainable economic development. By leveraging digital transformation, regions can improve their green innovation capabilities, contributing to the broader goals of China’s “dual carbon” initiative and sustainable development. This study emphasizes the critical role of digital technologies in driving green innovation and calls for comprehensive strategies to enhance digital infrastructure, digital literacy, and environmental consciousness across all regions of China.