This study investigates how perceived ESG influences competitive performance through green technology innovation, with a focus on the moderating role of digital transformation. Grounded in social exchange theory and extending stakeholder exchange orchestration mechanisms, the research proposes that ESG initiatives foster reciprocal stakeholder relationships that drive innovation and performance through specific temporal and cultural exchange processes. Using survey data from 453 Chinese green manufacturing enterprises, we applied structural equation modeling to test the theoretical framework. Findings show that all perceived ESG dimensions, environmental, social, and governance significantly enhance both green technology innovation and competitive performance. Green technology innovation serves as a key mediator, illustrating how sustainability initiatives create competitive advantages through innovation mechanisms. Digital transformation amplifies these effects across all perceived ESG dimensions. This research contributes to sustainability literature by introducing stakeholder exchange orchestration theory, validating perception-based ESG measurements in emerging market contexts, and demonstrating digitally enhanced social exchange mechanisms. For practitioners, the study provides resource-constrained implementation strategies and innovation-focused approaches essential to maximize sustainable competitive performance outcomes. The results offer empirically grounded insights into how sustainability practices can drive innovation-based competitive advantages in emerging economies.
Fan et al. (Fri,) studied this question.