Digital Transformation, Disclosure Quality, and GreenInnovation: ‎What Does Board Independence Matter?‎

Authors

  • Jia Guo

    Graduate School of Management, Postgraduate Centre, Management and Science ‎University, Shah Alam, Selangor, Malaysia

  • Aza Azlina Md Kassim

    Graduate School of Management, Postgraduate Centre, Management and Science ‎University, Shah Alam, Selangor, Malaysia

How to Cite

Guo, J., & Kassim, A. A. M. . (2025). Digital Transformation, Disclosure Quality, and GreenInnovation: ‎What Does Board Independence Matter?‎. International Journal of Accounting and Economics Studies, 12(4), 246-258. https://doi.org/10.14419/zd9jjr88

Received date: July 27, 2025

Accepted date: August 3, 2025

Published date: August 9, 2025

DOI:

https://doi.org/10.14419/zd9jjr88

Keywords:

Digital Transformation; Disclosure Quality; Green Innovation; Board Independence; ‎China

Abstract

Environmental issues emerge due to rapid economic growth, and the Chinese government ‎responds to these issues by issuing environmental regulations and providing environmental ‎subsidies. In this case, corporations are under increasing pressure to change their production ‎and operation models. Based on this background, corporations need to integrate sustainable ‎practices into their operations, such as developing green innovation. In addition, digital ‎transformation has been recognized by corporations as a critical development direction. This ‎is attributed to the fact that digital technologies provide advanced tools and systems for ‎monitoring, reporting, and optimizing operations. These capabilities may improve the ‎operational efficiency of corporations, increase data transparency, and improve disclosure ‎quality, which appears to affect the development of green innovation. This research uses the ‎data of Chinese corporations to explore the impact of digital transformation on green ‎innovation, analyzes disclosure quality as a mediating mechanism, and emphasizes the role ‎of board independence‎.

References

  1. Bai, X., & Lyu, C. (2023). Environmental Information Disclosure and Corporate Green Innovation: The Moderating Effect of Formal and Informal Institutions. Sustainability, 15(7), 6169. https://doi.org/10.3390/su15076169.
  2. Björkdahl, J. (2020). Strategies for digitalization in manufacturing firms. California management review, 62(4), 17-36. https://doi.org/10.3390/su15076169
  3. Bolourian, S., Angus, A., & Alinaghian, L. (2021). The impact of corporate governance on corporate social responsibility at the board-level: A critical assessment. Journal of Cleaner Production, 291, 125752. https://doi.org/10.1016/j.jclepro.2020.125752.
  4. Celtekligil, K. (2020). Resource Dependence Theory. In: Dincer, H., Yüksel, S. (eds) Strategic Outlook for Innovative Work Behaviours. Contribu-tions to Management Science. Springer, Cham. https://doi.org/10.1007/978-3-030-50131-0_7.
  5. Changyong, F. E. N. G., Hongyue, W. A. N. G., Naiji, L. U., Tian, C. H. E. N., Hua, H. E., & Ying, L. U. (2014). Log-transformation and its impli-cations for data analysis. Shanghai archives of psychiatry, 26(2), 105.
  6. Chen, A., & Chen, H. (2021). Decomposition analysis of green technology innovation from green patents in China. Mathematical Problems in Engi-neering, 2021(1), 6672656. https://doi.org/10.1155/2021/6672656.
  7. Chen, H., Zhong, T., & Lee, J. Y. (2020). Capacity reduction pressure, financing constraints, and enterprise sustainable innovation investment: Evi-dence from Chinese manufacturing companies. Sustainability, 12(24), 10472. https://doi.org/10.3390/su122410472.
  8. Chen, W. (2020). Intelligent manufacturing production line data monitoring system for industrial internet of things. Computer communications, 151, 31-41. https://doi.org/10.1016/j.comcom.2019.12.035.
  9. Chen, Z., & Liang, M. (2023). How do external and internal factors drive green innovation practices under the influence of big data analytics capabil-ity: Evidence from China. Journal of Cleaner Production, 404, 136862. https://doi.org/10.1016/j.jclepro.2023.136862.
  10. Chen, Z., Hao, X., & Chen, F. (2023). Green innovation and enterprise reputation value. Business Strategy and the Environment, 32(4), 1698-1718. https://doi.org/10.1002/bse.3213
  11. Chintrakarn, P., Jiraporn, P., & Treepongkaruna, S. (2021). How do independent directors view corporate social responsibility (CSR) during a stressful time? Evidence from the financial crisis. International Review of Economics & Finance, 71, 143-160. https://doi.org/10.1016/j.iref.2020.08.007.
  12. Cioffi, R., Travaglioni, M., Piscitelli, G., Petrillo, A., & De Felice, F. (2020). Artificial intelligence and machine learning applications in smart produc-tion: Progress, trends, and directions. Sustainability, 12(2), 492. https://doi.org/10.3390/su12020492.
  13. Cong, L. W., & He, Z. (2019). Blockchain disruption and smart contracts. The Review of Financial Studies, 32(5), 1754-1797. https://doi.org/10.1093/rfs/hhz007.
  14. Dou, Q., & Gao, X. (2023). How does the digital transformation of corporates affect green technology innovation? An empirical study from the per-spective of asymmetric effects and structural breakpoints. Journal of Cleaner Production, 428, 139245. https://doi.org/10.1016/j.jclepro.2023.139245.
  15. Feng, H., Wang, F., Song, G., & Liu, L. (2022). Digital transformation on enterprise green innovation: Effect and transmission mechanism. Interna-tional journal of environmental research and public health, 19(17), 10614. https://doi.org/10.3390/ijerph191710614.
  16. Fernández, Y. F., López, M. F., & Blanco, B. O. (2018). Innovation for sustainability: the impact of R&D spending on CO2 emissions. Journal of Cleaner Production, 172, 3459-3467. https://doi.org/10.1016/j.jclepro.2017.11.001.
  17. Feroz, A. K., Zo, H., & Chiravuri, A. (2021). Digital transformation and environmental sustainability: A review and research agenda. Sustainability, 13(3), 1530. https://doi.org/10.3390/su13031530.
  18. George, G., & Schillebeeckx, S. J. (2022). Digital transformation, sustainability, and purpose in the multinational enterprise. Journal of World Busi-ness, 57(3), 101326. https://doi.org/10.1016/j.jwb.2022.101326.
  19. Graf, M., Peter, M., & Gatziu-Grivas, S. (2019). Foster strategic orientation in the digital age: A methodic approach for guiding SME to a digital trans-formation. In Business Information Systems Workshops: BIS 2018 International Workshops, Berlin, Germany, July 18–20, 2018, Revised Papers 21 (pp. 420-432). https://doi.org/10.1007/978-3-030-04849-5_37 .
  20. Guinot, J., Barghouti, Z., & Chiva, R. (2022). Understanding green innovation: A conceptual framework. Sustainability, 14(10), 5787. https://doi.org/10.3390/su14105787.
  21. Guo, L., & Xu, L. (2021). The effects of digital transformation on firm performance: Evidence from China’s manufacturing sector. Sustainability, 13(22), 12844. https://doi.org/10.3390/su132212844
  22. 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. https://doi.org/10.3390/ijerph192013321.
  23. He, Q., Ribeiro-Navarrete, S., & Botella-Carrubi, D. (2024). A matter of motivation: the impact of enterprise digital transformation on green innova-tion. Review of Managerial Science, 18(5), 1489-1518. https://doi.org/10.1007/s11846-023-00665-6.
  24. Huang, S. Z., Chau, K. Y., Chien, F., & Shen, H. (2020). The impact of startups’ dual learning on their green innovation capability: The effects of business executives’ environmental awareness and environmental regulations. Sustainability, 12(16), 6526. https://doi.org/10.3390/su12166526.
  25. Karlilar, S., & Pata, U. K. (2025, February). Determinants of material footprint in OECD countries: The role of green innovation and environmental taxes. Natural resources forum, 49(1), 100-115, https://doi.org/10.1111/1477-8947.12379.
  26. Khan, F. U., Zhang, J., Usman, M., Badulescu, A., & Sial, M. S. (2019). Ownership reduction in state-owned enterprises and corporate social respon-sibility: perspective from secondary privatization in China. Sustainability, 11(4), 1008. https://doi.org/10.3390/su11041008.
  27. Khurshid, A., Rauf, A., Qayyum, S., Calin, A. C., & Duan, W. (2023). Green innovation and carbon emissions: the role of carbon pricing and envi-ronmental policies in attaining sustainable development targets of carbon mitigation—evidence from Central-Eastern Europe. Environment, Develop-ment and Sustainability, 25(8), 8777-8798. https://doi.org/10.1007/s10668-022-02422-3.
  28. Kolev, K. D., Wangrow, D. B., Barker III, V. L., & Schepker, D. J. (2019). Board committees in corporate governance: A cross‐disciplinary review and agenda for the future. Journal of Management Studies, 56(6), 1138-1193. https://doi.org/10.1111/joms.12444.
  29. 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), https://doi.org/10.1177/21582440211047576.
  30. Kraus, S., Rehman, S. U., & García, F. J. S. (2020). Corporate social responsibility and environmental performance: The mediating role of environ-mental strategy and green innovation. Technological forecasting and social change, 160, 120262. https://doi.org/10.1016/j.techfore.2020.120262.
  31. Li, L., Su, F., Zhang, W., & Mao, J. Y. (2018). Digital transformation by SME entrepreneurs: A capability perspective. Information Systems Journal, 28(6), 1129-1157. https://doi.org/10.1111/isj.12153.
  32. Li, S., Gao, L., Han, C., Gupta, B., Alhalabi, W., & Almakdi, S. (2023). Exploring the effect of digital transformation on Firms’ innovation perfor-mance. Journal of Innovation & Knowledge, 8(1), 100317. https://doi.org/10.1016/j.jik.2023.100317.
  33. Li, W. (2022). Big Data precision marketing approach under IoT cloud platform information mining. Computational intelligence and neuroscience, 2022(1), 4828108. https://doi.org/10.1155/2022/4828108.
  34. Lin, B., & Xie, Y. (2024). Impacts of digital transformation on corporate green technology innovation: Do board characteristics play a role?. Corporate Social Responsibility and Environmental Management, 31(3), 1741-1755. https://doi.org/10.1002/csr.2653.
  35. Lin, H., Zeng, S. X., Ma, H. Y., Qi, G. Y., & Tam, V. W. (2014). Can political capital drive corporate green innovation? Lessons from China. Journal of cleaner production, 64, 63-72. https://doi.org/10.1016/j.jclepro.2013.07.046.
  36. Lin, R. H., Chuang, W. W., Chuang, C. L., & Chang, W. S. (2021). Applied big data analysis to build customer product recommendation model. Sus-tainability, 13(9), 4985. https://doi.org/10.3390/su13094985.
  37. Liu, M., Li, H., Li, C., & Yan, Z. (2023). Digital transformation, financing constraints and enterprise performance. European Journal of Innovation Management, 28(4), 1472-1497. https://doi.org/10.1108/EJIM-05-2023-0349.
  38. Liu, X. (2023). Enterprise digital transformation and green innovation. Industrial Engineering and Innovation Management, 6(2), 8-17. https://doi.org/10.23977/ieim.2023.060202.
  39. Liu, Y., & Song, P. (2023). Digital transformation and green innovation of energy enterprises. Sustainability, 15(9), 7703. https://doi.org/10.3390/su15097703.
  40. Ma, X., Ock, Y. S., Wu, F., & Zhang, Z. (2022). The effect of internal control on green innovation: corporate environmental investment as a mediator. Sustainability, 14(3), 1755. https://doi.org/10.3390/su14031755.
  41. Mahdi, M., & Khaddafi, M. (2020). The influence of gross profit margin, operating profit margin and net profit margin on the stock price of consumer good industry in the Indonesia stock exchange on 2012-2014. International Journal of Business, Economics, and Social Development, 1(3), 153-163. https://doi.org/10.46336/ijbesd.v1i3.53.
  42. Martínez Falcó, J., Sánchez-García, E., Marco-Lajara, B., & Akram, U. (2024). Digital transformation and green innovation performance: unraveling the role of green knowledge sharing and top management environmental awareness. Internet Research. https://doi.org/10.1108/INTR-11-2023-1016.
  43. Martínez Falcó, J., Sánchez-García, E., Marco-Lajara, B., & Akram, U. (2024). Digital transformation and green innovation performance: unraveling the role of green knowledge sharing and top management environmental awareness. Internet Research. https://doi.org/10.1108/INTR-11-2023-1016.
  44. Martins, A., Gomes, D., & Branco, M. C. (2020). Managing corporate social and environmental disclosure: An accountability vs. impression man-agement framework. Sustainability, 13(1), 296. https://doi.org/10.3390/su13010296.
  45. Masulis, R. W., & Zhang, E. J. (2019). How valuable are independent directors? Evidence from external distractions. Journal of Financial Economics, 132(3), 226-256. https://doi.org/10.1016/j.jfineco.2018.02.014.
  46. Miao, Z. (2022). Industry 4.0: technology spillover impact on digital manufacturing industry. Journal of Enterprise Information Management, 35(4/5), 1251-1266. https://doi.org/10.1108/JEIM-02-2021-0113.
  47. Mikalef, P., Krogstie, J., Pappas, I. O., & Pavlou, P. (2020). Exploring the relationship between big data analytics capability and competitive perfor-mance: The mediating roles of dynamic and operational capabilities. Information & Management, 57(2), 103169. https://doi.org/10.1016/j.im.2019.05.004.
  48. Neville, F., Byron, K., Post, C., & Ward, A. (2019). Board independence and corporate misconduct: A cross-national meta-analysis. Journal of Man-agement, 45(6), 2538-2569. https://doi.org/10.1177/0149206318801999.
  49. Nosratabadi, S., Atobishi, T., & Hegedűs, S. (2023). Social sustainability of digital transformation: Empirical evidence from EU-27 countries. Admin-istrative Sciences, 13(5), 126. https://doi.org/10.3390/admsci13050126.
  50. Proeger, T., & Runst, P. (2020). Digitization and knowledge spillover effectiveness—Evidence from the “German Mittelstand”. Journal of the Knowledge Economy, 11(4), 1509-1528. https://doi.org/10.1007/s13132-019-00622-3.
  51. Ramzan, M., Razi, U., Quddoos, M. U., & Adebayo, T. S. (2023). Do green innovation and financial globalization contribute to the ecological sus-tainability and energy transition in the United Kingdom? Policy insights from a bootstrap rolling window approach. Sustainable Development, 31(1), 393-414. https://doi.org/10.1002/sd.2399.
  52. Restrepo, L. F., Tellez-Falla, D., & Godoy-Bejarano, J. (2022). Information disclosure quality and firm value: empirical evidence for an emerging in-tegrated market. Academia Revista Latinoamericana de Administración, 35(3), 345-365. https://doi.org/10.1108/ARLA-05-2021-0109
  53. Scarpellini, S., Portillo-Tarragona, P., & Marin-Vinuesa, L. M. (2019). Green patents: a way to guide the eco-innovation success process?. Academia Revista Latinoamericana de Administración, 32(2), 225-243. https://doi.org/10.1108/ARLA-07-2017-0233.
  54. Schmidt, C. G., & Wagner, S. M. (2019). Blockchain and supply chain relations: A transaction cost theory perspective. Journal of Purchasing and Supply Management, 25(4), 100552. https://doi.org/10.1016/j.pursup.2019.100552.
  55. Shao, S., Hu, Z., Cao, J., Yang, L., & Guan, D. (2020). Environmental regulation and enterprise innovation: a review. Business strategy and the envi-ronment, 29(3), 1465-1478. https://doi.org/10.1002/bse.2446
  56. Shen, L., Zhang, X., & Liu, H. (2022). Digital technology adoption, digital dynamic capability, and digital transformation performance of textile in-dustry: Moderating role of digital innovation orientation. Managerial and Decision Economics, 43(6), 2038-2054. https://doi.org/10.1002/mde.3507
  57. Sreenu, N. (2025). Digital finance and green technology innovation in India: exploring the role of financing constraints. Quality & Quantity, 1-26. https://doi.org/10.1007/s11135-025-02291-8.
  58. Suddaby, R., Coraiola, D., Harvey, C., & Foster, W. (2020). History and the micro-foundations of dynamic capabilities. Strategic Management Jour-nal, 41(3), 530-556. https://doi.org/10.1002/smj.3058.
  59. Sun, Y., & He, M. (2023). Does digital transformation promote green innovation? A micro-level perspective on the Solow Paradox. Frontiers in Envi-ronmental Science, 11, 1134447. https://doi.org/10.3389/fenvs.2023.1134447.
  60. Tang, M., Liu, Y., Hu, F., & Wu, B. (2023). Effect of digital transformation on enterprises' green innovation: empirical evidence from listed companies in China. Energy Economics, 128, 107135. https://doi.org/10.1016/j.eneco.2023.107135.
  61. Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic management journal, 18(7), 509-533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z.
  62. Wamba, S. F., Gunasekaran, A., Akter, S., Ren, S. J. F., Dubey, R., & Childe, S. J. (2017). Big data analytics and firm performance: Effects of dy-namic capabilities. Journal of business research, 70, 356-365. https://doi.org/10.1016/j.jbusres.2016.08.009.
  63. Wang, X., & Zhong, X. (2024). Digital transformation and green innovation: firm-level evidence from China. Frontiers in Environmental Science, 12, 1389255. https://doi.org/10.3389/fenvs.2024.1389255.
  64. Waqas, M., Honggang, X., Ahmad, N., Khan, S. A. R., & Iqbal, M. (2021). Big data analytics as a roadmap towards green innovation, competitive advantage and environmental performance. Journal of Cleaner Production, 323, 128998. https://doi.org/10.1016/j.jclepro.2021.128998
  65. Warner, K. S., & Wäger, M. (2019). Building dynamic capabilities for digital transformation: An ongoing process of strategic renewal. Long range planning, 52(3), 326-349. https://doi.org/10.1016/j.lrp.2018.12.001.
  66. Wiesböck, F., & Hess, T. (2020). Digital innovations: Embedding in organizations. Electronic Markets, 30(1), 75-86. https://doi.org/10.1007/s12525-019-00364-9.
  67. Wu, F., Fu, X., Zhang, T., Wu, D., & Sindakis, S. (2022). Examining whether government environmental regulation promotes green innovation effi-ciency—evidence from China’s Yangtze river economic belt. Sustainability, 14(3), 1827. https://doi.org/10.3390/su14031827.
  68. Wu, F., Hu, H., and Lin, H. (2021). Enterprise digital transformation and capital market performance: Empirical evidence from stock liquidity. Man-agement World, 37 (7), 130–144.
  69. Xia, H., Ye, P., Jasimuddin, S. M., & Zhang, J. Z. (2024). Evolution of digital transformation in traditional enterprises: Evidence from China. Tech-nology Analysis & Strategic Management, 36(9), 2014-2034. https://doi.org/10.1080/09537325.2022.2124909.
  70. Xia, L., Baghaie, S., & Sajadi, S. M. (2024). The digital economy: Challenges and opportunities in the new era of technology and electronic commu-nications. Ain Shams Engineering Journal, 15(2), 102411. https://doi.org/10.1016/j.asej.2023.102411
  71. Xia, L., Gao, S., Wei, J., & Ding, Q. (2022). Government subsidy and corporate green innovation-Does board governance play a role?. Energy Poli-cy, 161, 112720. https://doi.org/10.1016/j.enpol.2021.112720.
  72. Xiang, X., Liu, C., & Yang, M. (2022). Who is financing corporate green innovation?. International Review of Economics & Finance, 78, 321-337. https://doi.org/10.1016/j.iref.2021.12.011.
  73. Xie, X., Hoang, T. T., & Zhu, Q. (2022). Green process innovation and financial performance: The role of green social capital and customers’ tacit green needs. Journal of Innovation & Knowledge, 7(1), 100165. https://doi.org/10.1016/j.jik.2022.100165.
  74. Xu, C., Sun, G., & Kong, T. (2024). The impact of digital transformation on enterprise green innovation. International Review of Economics & Fi-nance, 90, 1-12. https://doi.org/10.1016/j.iref.2023.11.001 .
  75. Xu, H., & Rhee, C. S. (2018). Corporate governance structure and accounting information disclosure quality: Evidence from Shenzhen stock ex-change in China. Asian International Studies Review, 19(1), 99-116. https://doi.org/10.1163/2667078X-01901005
  76. Xu, J., Yu, Y., Zhang, M., & Zhang, J. Z. (2023). Impacts of digital transformation on eco-innovation and sustainable performance: Evidence from Chinese manufacturing companies. Journal of Cleaner Production, 393, 136278. https://doi.org/10.1016/j.jclepro.2023.136278
  77. Xue, L., Zhang, Q., Zhang, X., & Li, C. (2022). Can digital transformation promote green technology innovation?. Sustainability, 14(12), 7497. https://doi.org/10.3390/su14127497.
  78. Yang, Y., Zhu, Y., Li, Y., Zheng, Z., & Han, Y. (2023). The effect of CEO succession on green technology innovation: the mediating effect of earnings management. Environment, Development and Sustainability. https://doi.org/10.1007/s10668-023-04203-y.
  79. Yin, S., & Yu, Y. (2022). An adoption-implementation framework of digital green knowledge to improve the performance of digital green innovation practices for industry 5.0. Journal of Cleaner Production, 363, 132608. https://doi.org/10.1016/j.jclepro.2022.132608.
  80. Yin, S., Zhang, N., Ullah, K., & Gao, S. (2022). Enhancing digital innovation for the sustainable transformation of manufacturing industry: a pres-sure-state-response system framework to perceptions of digital green innovation and its performance for green and intelligent manufacturing. Systems, 10(3), 72. https://doi.org/10.3390/systems10030072.
  81. Yu, C. H., Wu, X., Zhang, D., Chen, S., & Zhao, J. (2021). Demand for green finance: Resolving financing constraints on green innovation in China. Energy policy, 153, 112255. https://doi.org/10.1016/j.enpol.2021.112255.
  82. Yusliza, M. Y., Yong, J. Y., Tanveer, M. I., Ramayah, T., Faezah, J. N., & Muhammad, Z. (2020). A structural model of the impact of green intellectual capital on sustainable performance. Journal of Cleaner Production, 249, 119334. https://doi.org/10.1016/j.jclepro.2019.119334.
  83. Zhang, G., Gao, Y., & Li, G. (2023). Research on digital transformation and green technology innovation—evidence from China’s listed manufactur-ing enterprises. Sustainability, 15(8), 6425. https://doi.org/10.3390/su15086425
  84. Zhang, H., Wu, J., Mei, Y., & Hong, X. (2024). Exploring the relationship between digital transformation and green innovation: The mediating role of financing modes. Journal of Environmental Management, 356, 120558. https://doi.org/10.1016/j.jenvman.2024.120558.
  85. Zhang, M., & Huang, M. (2023). Study on the impact of informal environmental regulation on substantive green innovation in China: Evidence from PITI disclosure. Environmental Science and Pollution Research, 30(4), 10444-10456. https://doi.org/10.1007/s11356-022-22868-2.
  86. Zhang, Q., Yang, M., & Lv, S. (2022). Corporate digital transformation and green innovation: A quasi-natural experiment from integration of in-formatization and industrialization in China. International Journal of Environmental Research and Public Health, 19(20), 13606. https://doi.org/10.3390/ijerph192013606.
  87. Zhao, J., Qu, J., Wei, J., Yin, H., & Xi, X. (2023). The effects of institutional investors on firms' green innovation. Journal of Product Innovation Management, 40(2), 195-230. https://doi.org/10.1111/jpim.12652
  88. Zheng, Q., Li, J., & Duan, X. (2023). The impact of environmental tax and R&D tax incentives on green innovation. Sustainability, 15(9), 7303. https://doi.org/10.3390/su15097303.

Downloads

How to Cite

Guo, J., & Kassim, A. A. M. . (2025). Digital Transformation, Disclosure Quality, and GreenInnovation: ‎What Does Board Independence Matter?‎. International Journal of Accounting and Economics Studies, 12(4), 246-258. https://doi.org/10.14419/zd9jjr88

Received date: July 27, 2025

Accepted date: August 3, 2025

Published date: August 9, 2025