Digital transformation, green investment, and green transformation in manufacturing: empirical evidence from Chinese listed manufacturing firms

Abstract

Manufacturing firms are being pushed to reduce energy use and carbon emissions while continuing to improve productivity and product quality. Against this background, this paper examines whether digital transformation helps firms achieve greener modes of production and management. Using A-share manufacturing companies listed on the Shanghai and Shenzhen stock exchanges during 2012–2024, the study tests the effect of digital transformation on corporate green transformation and explores the role of green investment. The results show that firms with higher digital transformation scores tend to record better green transformation performance. This relationship remains statistically significant after firm-level controls, firm fixed effects, and year fixed effects are included. The mechanism evidence is conditional rather than universal. Green investment does not serve as a complete transmission channel in the full manufacturing sample, but it has partial explanatory power in heavily polluting industries. In these sectors, digital transformation is more likely to be converted into energy-saving equipment renewal, environmental facility construction, and cleaner production projects. Further heterogeneity tests show larger estimated effects in heavily polluting and high-tech manufacturing industries, although the group differences are not statistically significant. The findings provide firm-level evidence on the digital–green linkage in manufacturing and suggest that policies should promote targeted digital–green integration, especially in pollution-intensive sectors.