Information technology and firm’s green innovation: evidence from China

Can the adoption of information technology (IT) by firms drive green innovation and stimulate sustainable development? This paper employs a quasi-natural experiment, namely the “Pilot Zone for Integration of Informatization and Industrialization” in China, to evaluate the effect of IT on green innovation. Our findings reveal that IT significantly fosters the proliferation of green invention patents but has inconsequential impact on green utility model patents. Notably, the positive effects of IT on green innovation are further amplified when firms receive scrutiny from analysts. Moreover, IT can facilitate green innovation in the source-governance category of conventional energy and not only in end-of-pipe regulatory compliance. The study generates valuable insights regarding the utilization of information technology by firms as a means to facilitate green innovation.