Digitalization, green finance, and low-carbon transformation in manufacturing firms: a firm-level panel analysis from Shenzhen

Against the background of China’s carbon peaking and carbon neutrality goals, this study examines how the improvement of digitalization shapes the low-carbon transformation of manufacturing firms through social, institutional, and economic mechanisms. While this study regards low carbon as a problem of technology or energy efficiency, it also frames firm-level transformation as a socio-economic governance process involving policy regulation, organizational adaptation, green finance, and digital capability. Shenzhen, as China’s first emissions trading system pilot city and also a carbon peaking pilot city in China, is taken as a typical case for studying local carbon governance and digital transformation, and this case provides an appropriate background for the interaction of advanced manufacturing economic development. This study uses firm-level panel data from 150 manufacturing enterprises from 2015 to 2024, and constructs a four-dimensional analytical framework including policy instruments, technological upgrading, green finance, and the improvement of digitalization. Fixed-effects panel models are used to examine their direct effects, interaction effects, and the moderating role of digitalization improvement on three outcomes, specifically carbon emission intensity, energy intensity, and green innovation output. The results show that digitalization improvement, policy exposure, and access to technological upgrading factors are generally related to the improvement of low-carbon performance, although their effects on environmental efficiency and innovation outcomes are different. There are significant interaction effects among policy tools, technological pathways, and green finance, and the study shows that low-carbon transformation at the enterprise level depends on each driving factor, and also depends on the coordination of regulatory, technological, and financial institutions. This study contributes to the literature on digital transformation and industrial decarbonization by providing firm-level evidence on how digitalization, policy exposure, green finance, and technological upgrading jointly promote low-carbon transformation in manufacturing firms.