Green Innovation as a Mediating Mechanism between Digital Transformation and Business Sustainability: An Empirical Study
Keywords:
Digital Transformation, Green Innovation, Business Sustainability, Sustainable Digital Transformation, PLS-SEMAbstract
Digital transformation has become a strategic priority for organizations seeking to enhance competitiveness and long-term sustainability. However, digital technologies alone cannot guarantee sustainable business outcomes without organizational capabilities that foster environmentally responsible innovation. Green innovation is therefore considered a key mechanism linking digital transformation to business sustainability. This study examines the effect of digital transformation on business sustainability and investigates the mediating role of green innovation. A quantitative explanatory study with a cross-sectional survey design was employed. Data were collected from managers of organizations implementing digital transformation using a structured five-point Likert-scale questionnaire. Purposive sampling was applied, and the proposed model was analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM), including reliability, validity, bootstrapping, and mediation analyses. The findings reveal that digital transformation positively and significantly affects both business sustainability and green innovation. Green innovation also has a significant positive effect on business sustainability and significantly mediates the relationship between digital transformation and business sustainability, indicating that digital capabilities generate stronger sustainability outcomes when translated into environmentally sustainable innovations. Green innovation is a crucial mechanism connecting digital transformation with business sustainability. Integrating digital technologies with green innovation enables organizations to enhance economic, environmental, and social performance, providing valuable insights for managers and policymakers pursuing sustainable digital transformation.
Downloads
References
Andronie, M., Lăzăroiu, G., Iatagan, M., Hurloiu, I., & Dijmărescu, I. (2021). Sustainable cyber-physical production systems in big data-driven smart urban economy: A systematic literature review. Sustainability, 13(2), 751.
Bernard, R. M., Abrami, P. C., Lou, Y., Borokhovski, E., Wade, A., Wozney, L., Wallet, P. A., Fiset, M., & Huang, B. (2004). How does distance education compare with classroom instruction? A meta-analysis of the empirical literature. Review of Educational Research, 74(3), 379–439.
Berrou, J.-P., Combarnous, F., Eekhout, T., & Mellet, K. (2020). My mobile, my market: The uses of mobile phones and economic performance in the informal sector in Dakar. Réseaux, 219(1), 105–142.
Camilleri, M. A. (2017). Corporate sustainability and responsibility: creating value for business, society and the environment. Asian Journal of Sustainability and Social Responsibility, 2(1), 59–74.
Campbell, S., Greenwood, M., Prior, S., Shearer, T., Walkem, K., Young, S., Bywaters, D., & Walker, K. (2020). Purposive sampling: complex or simple? Research case examples. Journal of Research in Nursing, 25(8), 652–661.
Casalino, N., Żuchowski, I., Labrinos, N., Munoz Nieto, Á. L., & Martín, J. A. (2019). Digital strategies and organizational performances of SMEs in the age of Coronavirus: balancing digital transformation with an effective business resilience. Queen Mary School of Law Legal Studies Research Paper Forthcoming.
DeVon, H. A., Block, M. E., Moyle‐Wright, P., Ernst, D. M., Hayden, S. J., Lazzara, D. J., Savoy, S. M., & Kostas‐Polston, E. (2007). A psychometric toolbox for testing validity and reliability. Journal of Nursing Scholarship, 39(2), 155–164.
Dong, B., Evans, K. R., & Zou, S. (2008). The effects of customer participation in co-created service recovery. Journal of the Academy of Marketing Science, 36(1), 123–137.
El Hilali, W., El Manouar, A., & Janati Idrissi, M. A. (2020). Reaching sustainability during a digital transformation: a PLS approach. International Journal of Innovation Science, 12(1), 52–79.
Feng, H., Wang, F., Song, G., & Liu, L. (2022). Digital transformation on enterprise green innovation: Effect and transmission mechanism. International Journal of Environmental Research and Public Health, 19(17), 10614.
Gereffi, G., & Fernandez-Stark, K. (2011). Global value chain analysis: a primer. Center on Globalization, Governance & Competitiveness (CGGC), Duke University, North Carolina, USA, 33.
Hanelt, A., Bohnsack, R., Marz, D., & Antunes Marante, C. (2021). A systematic review of the literature on digital transformation: Insights and implications for strategy and organizational change. Journal of Management Studies, 58(5), 1159–1197.
Hart, S. L., & Dowell, G. (2011). Invited editorial: A natural-resource-based view of the firm: Fifteen years after. Journal of Management, 37(5), 1464–1479.
He, J., & Su, H. (2022). Digital transformation and green innovation of Chinese firms: the moderating role of regulatory pressure and international opportunities. International Journal of Environmental Research and Public Health, 19(20), 13321.
Kraus, S., Jones, P., Kailer, N., Weinmann, A., Chaparro-Banegas, N., & Roig-Tierno, N. (2021). Digital transformation: An overview of the current state of the art of research. Sage Open, 11(3), 21582440211047576.
Kunkel, S., & Matthess, M. (2020). Digital transformation and environmental sustainability in industry: Putting expectations in Asian and African policies into perspective. Environmental Science & Policy, 112, 318–329.
Le, T. T. (2022). How do corporate social responsibility and green innovation transform corporate green strategy into sustainable firm performance? Journal of Cleaner Production, 362, 132228.
Le, T. T., Vo, X. V., & Venkatesh, V. G. (2022). Role of green innovation and supply chain management in driving sustainable corporate performance. Journal of Cleaner Production, 374, 133875.
Li, F. (2020). Leading digital transformation: three emerging approaches for managing the transition. International Journal of Operations & Production Management, 40(6), 809–817.
Li, M., Tian, Z., Liu, Q., & Lu, Y. (2022). Literature review and research prospect on the drivers and effects of green innovation. Sustainability, 14(16), 9858.
Miceli, A., Hagen, B., Riccardi, M. P., Sotti, F., & Settembre-Blundo, D. (2021). Thriving, not just surviving in changing times: How sustainability, agility and digitalization intertwine with organizational resilience. Sustainability (2071-1050), 13(4), 2052.
Mohammed, S. H., & Kinyó, L. (2022). The cross-cultural validation of the technology-enhanced social constructivist learning environment questionnaire in the Iraqi Kurdistan Region. Research and Practice in Technology Enhanced Learning, 17(1), 25.
Qiu, L., Jie, X., Wang, Y., & Zhao, M. (2020). Green product innovation, green dynamic capability, and competitive advantage: Evidence from Chinese manufacturing enterprises. Corporate Social Responsibility and Environmental Management, 27(1), 146–165.
Schaltegger, S., & Wagner, M. (2017). Managing the business case for sustainability: The integration of social, environmental and economic performance. Routledge.
Svensson, G., Høgevold, N., Ferro, C., Varela, J. C. S., Padin, C., & Wagner, B. (2016). A triple bottom line dominant logic for business sustainability: Framework and empirical findings. Journal of Business-to-Business Marketing, 23(2), 153–188.
Testa, R. J., Rider, G. N., Haug, N. A., & Balsam, K. F. (2017). Gender confirming medical interventions and eating disorder symptoms among transgender individuals. Health Psychology, 36(10), 927.
Waddock, S. A., Bodwell, C., & Graves, S. B. (2002). Responsibility: The new business imperative. Academy of Management Perspectives, 16(2), 132–148.
Wang, C.-H. (2019). How organizational green culture influences green performance and competitive advantage: The mediating role of green innovation. Journal of Manufacturing Technology Management, 30(4), 666–683.
Wier, B., Hunton, J., & HassabElnaby, H. R. (2007). RETRACTED: Enterprise resource planning systems and non-financial performance incentives: The joint impact on corporate performance. Elsevier.
Wong, K. K.-K. (2019). Mastering partial least squares structural equation modeling (PLS-Sem) with Smartpls in 38 Hours. IUniverse.
Xu, G., Hou, G., & Zhang, J. (2022). Digital Sustainable Entrepreneurship: A digital capability perspective through digital innovation orientation for social and environmental value creation. Sustainability, 14(18), 11222.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Zhi Ruo, Nian Zhen
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
