Crossing the digital Rubicon: innovation pathways and strategic choices in China's coal industry transformation

This study examines how digital transformation impacts total factor productivity (TFP) in Chinese coal enterprises through technological innovation. Using panel data from A-share listed coal companies (2012-2022), we find that digital transformation significantly enhances TFP by fostering innovation in decision making, production techniques, and business models. We uncover a nuanced relationship between government subsidies and innovation: moderate subsidies amplify digital transformation's positive effects, while excessive subsidies may crowd out independent innovation. Managerial short-termism can impede technological advancement and diminish digitalisation benefits. Heterogeneity analysis shows digitalisation's positive impacts are more pronounced in central regions and state-owned enterprises. This research contributes to the discourse on industrial policy, technological change, and sustainable development in carbon-intensive industries. It offers insights for policymakers navigating energy transition, emphasising the importance of balanced government support, long-term managerial vision, and targeted digital strategies in fostering innovation and productivity growth. [Received: February 4, 2025; Accepted: July 2, 2025]