Decoding the Green Code: Digital Technology, Talent Re-Structuring, and the Path to Green Innovation Efficiency

The manufacturing sector’s pursuit of green transformation amidst the digital revolution presents a critical challenge. Using a comprehensive panel dataset from 2012 to 2022, we analyze how digital technology, through its influence on a firm’s human capital structure, impacts green innovation. Our findings show that digital technology significantly boosts a firm’s green innovation efficiency. We identify two distinct mechanisms: digitalization indirectly enhances efficiency by reconfiguring the workforce to decrease the proportion of production personnel, while it directly drives innovation by increasing the share of sales and technical staff. The analysis also reveals a dual effect of an expanding internal compensation gap, which intensifies the displacement of production workers while weakening the firm’s ability to attract and retain core talent. Further heterogeneity analysis reveals that the impact of digital technology on green innovation efficiency is more significant in high-tech industries, non-capital-intensive industries, and non-heavily polluting industries. These findings provide a deeper understanding of the interdependent mechanisms linking digital transformation to sustainable innovation, offering valuable insights for managers and policymakers aiming to strategically align digital, human, and organizational factors for green development.