Complementary or conflicting? Dynamic capabilities and technological innovation in digital–green twin transformation

The concurrent pursuit of digitalization and sustainability in recent years has driven firms toward a digital–green twin transformation. Although existing studies often emphasize the potential synergies between these transformations, it remains unclear whether the underlying capabilities reinforce or constrain one another when digital and green innovation trajectories are developed concurrently. Drawing on the dynamic capability perspective, this study conceptualizes twin transformation as a staged process of sensing, seizing, and reconfiguration across parallel digital and green technological trajectories. It examines how interactions between these capabilities shape their complementarities or tensions. Using Taiwanese high-tech firms as an empirical context, our results reveal that digital and green capabilities primarily reinforce technological innovation within their respective trajectories. Simultaneously, cross-domain interactions tend to be competitive rather than complementary. The structural competition between the two trajectories is strongest at the reconfiguration stage, where firms must translate seized technological opportunities into concrete innovation outputs. Joint development of both trajectories does not maximize either but sustains both at a feasible level under simultaneous transformation pressures. This study contributes to the literature on twin transformation by suggesting that it is best understood at the innovation trajectory level as a process of competitive compromise. This shifts the discussion from whether digital and green capabilities are complementary or conflicting to how their concurrent development unfolds under the conditions of structural competition.