Digital transformation and green total factor productivity: A contingency perspective on spatial and social embeddedness

Green high-quality development requires balancing environmental sustainability with manufacturing growth. Using data from Chinese publicly listed firms from 2012 to 2021, this study demonstrates that digital transformation (DT) significantly increases green total factor productivity (GTFP) in the manufacturing sector. This finding remains robust across endogeneity and specification tests, including instrumental variable approaches and Heckman selection models. Mechanism analysis reveals that both market competition and public environmental concern positively moderate the DT-GTFP nexus. Heterogeneity analysis indicates that this positive impact is more pronounced in the eastern regions, during the early stages of DT, and among small-scale enterprises and non-heavily polluting industries. This study highlights the critical role of manufacturing DT in driving green development and offers flexible policy implications for aligning industrial upgrading with public aspirations for a higher quality of life.