A Study on the Mechanism of the Impact of Digital Transformation in Manufacturing Enterprises on Sustainable Development Performance

This study examines how top management’s environmental awareness and green innovation mediate the effects of digital transformation on sustainable development performance. The current study also looks at the institutional environment’s moderating role in the relationship between mediators (i.e., green innovation and top management’s environmental awareness) and digital transformation. The research uses regression analysis to examine hypotheses on how digital transformation affects firms’ sustainable development performance. It does this by using an imbalanced panel dataset including 1,805 Chinese publicly listed manufacturing companies from 2010 to 2021. The findings reveal that digital transformation is positively related to sustainable development performance. Besides, the relationship between digital transformation and sustainable development performance is mediated by increased green innovation and environmental awareness among top management. Furthermore, a supportive institutional environment enhances the impact of digital transformation on top management’s environmental awareness and green innovation. The study provides new insights into the mechanisms by which digital transformation promotes economic and environmental sustainability in China’s industrial sector. The findings have important implications for businesses looking to use digital technology to increase competitiveness while also achieving China’s "dual carbon" aims of green innovation and environmentally responsible leadership. Theoretical contributions include integrating an institution-based perspective to better comprehend contextual implications on long-term digital transformation.