Unlocking sustainable production pathways: Digital transformation driving green dual innovation in Chinese enterprises

In the context of accelerating digital transformation and increasing environmental pressures, this study investigates how enterprise digitalization influences green dual innovation—comprising green exploratory innovation (EI) and green developmental innovation (DI)—within Chinese A-share listed firms from 2016 to 2023. Drawing upon fixed-effects and triple difference models, we empirically examine the mechanisms through which digital transformation (DCG) enhances green innovation and assess the mediating role of R&D investment and the moderating effect of government subsidies (GS). Results reveal that digital transformation significantly promotes both EI and DI, with a stronger effect on EI. R&D investment fully mediates this relationship, indicating that digital capabilities boost green innovation primarily through enhanced research capacity. Government subsidies exhibit a dual effect: they positively moderate the impact of digital transformation on EI, while dampening its influence on DI, possibly due to over-reliance on external funding. Heterogeneity analysis through triple difference methods uncovers substantial regional and industry-level variation—particularly among high-tech and heavily polluting firms in Eastern China—where digital transformation's green effects are constrained by strategic short-termism or technological limitations. These findings offer theoretical insights and practical implications for firms and policymakers aiming to align digital strategy with green transformation objectives under sustainability mandates. • Digital transformation (DCG) significantly boosts both green exploratory (EI) and developmental (DI) innovation, with a stronger effect on EI. • R&d investment is fully mediated in DCG and DI/EI, highlighting its key role in channeling digital capabilities. • Government subsidies (GS) positively moderate DCG's impact on EI but negatively moderate its effect on DI, revealing a dual policy effect. • Triple difference analysis reveals DCG’s green effects are constrained in Eastern China’s high-tech and heavy-polluting firms due to strategic short-termism or technological limitations. • The study provides evidence for optimizing digital-green synergy via tailored R&D strategies and differentiated subsidy policies.