Digital enabler or carbon culprit? The U-shaped trajectory of digital innovation on carbon emissions

While digital innovation (DI) is viewed as a key driver of industrial decarbonization, its environmental impact remains contested. The growing energy demand may induce Jevons-type rebound effects, challenging the sustainability of digital transition. Moving beyond linear and static perspectives, this study integrates dynamic capability theory with the technique-composition-scale framework to examine the nonlinear relationship between DI and carbon emissions (CE). Using panel data from Chinese A-share listed manufacturing firms from 2014 to 2021, the results reveal a robust U-shaped relationship: DI reduces CE in the early stage but increases it after further expansion. This pattern is more pronounced among younger firms and firms in low-energy-intensity sectors. External environmental regulation intensity steepens the curve by accelerating stage transitions, whereas corporate green investment scale acts as an internal buffer, flattening the curve and marginally shifting the turning point rightward. These findings provide stage-adaptive implications for balancing digital transformation with carbon reduction.