From sensing climate risks to integrating digital-green technologies: evidence from China

Compared with conventional green technologies, Digital-Green Technology Integration (DGTI) advances firms’ technological systems toward greater sophistication and intelligence, thereby enhancing their ability to cope with environmental and climate risks. This study develops a new measure of DGTI and examines how Climate Risk Perception (CRP) affects firms’ engagement in DGTI. Results show that CRP significantly promotes DGTI, and this effect remains robust across multiple endogeneity and robustness tests. Mechanism analyses indicate that CRP strengthens Digital-Green Integration Awareness (DGIA) and facilitates Digital-Green Knowledge Recombination (DGKR), which in turn advance DGTI. Additional evidence shows that Climate Policy Uncertainty (CPU) weakens the positive effect of CRP on DGTI. Further evidence indicates that the positive effect of CRP on DGTI is characterized by the dominance of digital technologies, is stronger among firms with higher innovation capability, and is more statistically significant among non-state-owned enterprises, although the marginal effect is larger among state-owned enterprises. This study provides micro-level evidence on how firms can respond proactively to climate risks by strengthening DGTI.