The non-linear effect of digital business strategies on green innovation in manufacturing: A moderated mediation analysis

The role of digital business strategies in fostering green innovation represents a critical knowledge gap in the literature. Drawing on the dynamic capability framework, we investigate the impact of digital business strategies on green innovation and analyze data from 175 Chinese manufacturing firms using hierarchical regression and fuzzy-set qualitative comparative analysis (fsQCA). The results demonstrate that digital business strategies exhibit an inverted U-shaped relationship with green innovation and green dynamic capabilities; the latter partially mediates the inverted U-shaped relationship between digital business strategies and green innovation. Institutional pressures positively moderate these two inverted U-shaped relationships and the linear link between green dynamic capabilities and green innovation. The fsQCA results corroborate the regression findings and advance the configurational literature on green innovation, identifying two distinct configurational paths to high green innovation. These findings elucidate the intricate mechanisms underlying the influence of digital business strategies on green innovation and offer a roadmap for manufacturing firms to effectively leverage these strategies.