Dynamic mechanism of digital technology empowering green innovation in manufacturing enterprises

Although the dual digital and green transformation has become a strategic imperative for manufacturing firms, whether and how digital technology effectively drives green innovation remains contested. This debate largely stems from concerns regarding digital divides and the potential for diminishing returns caused by excessive investment. To address this theoretical gap, this study develops a differential game model to examine the dynamic mechanisms through which digital technology enables green innovation across three distinct stages of the product lifecycle: research and development focused on green knowledge accumulation, manufacturing focused on product greenness, and post-sale operations focused on green service. Analytical and numerical results demonstrate three primary findings. First, digital technology, knowledge accumulation, product greenness, and service quality all exert positive effects on overall green innovation performance, with the marginal effects being stronger in the initial period. Second, green knowledge accumulation plays a dominant role relative to product greenness and green service. Third, the relationship between digital input and green innovation benefits follows an inverted U-shaped trajectory, which is regulated by a critical threshold determined by the ratio of technology sensitivity to application costs. These findings offer theoretical explanations for the digital divide phenomenon in green innovation and provide practical guidance for manufacturing firms seeking to optimize their digital investments and avoid overinvestment traps during sustainability transitions.