Digital Transformation, Green Innovation, and Managerial Myopia: Evidence from Manufacturing Firms under Robust Endogeneity and Selection-Bias Controls
Jie-Wei Name: Zhang
Journal of E-Technology, Vol. 17, No. 3, 2026.
DOI: https://doi.org/10.6025/jet/2026/17/3/122-138
Link: https://www.dline.info/jet/fulltext/v17n3/jetv17n3_2.pdf
Abstract:
This study investigates the impact of digital transformation on green innovation and examines whether
managerial myopia constrains digital innovation activities. Grounded in Upper Echelons, Resource Based,
and Dynamic Capability theories, the research addresses critical gaps regarding causal identification and
the interplay between technological capabilities and managerial cognition. Utilizing a longitudinal dataset
of Chinese listed manufacturing firms from 2011 to 2022, the analysis employs rigorous endogeneitycorrection
techniques, including lagged variable estimation, Two-Stage Least Squares instrumental variable
approaches, and Propensity Score Matching combined with Difference in Differences. The findings consistently
demonstrate that digital transformation exerts a significant positive causal effect on green innovation, with
results remaining robust across all identification strategies. Conversely, managerial myopia exhibits no
statistically significant impact on digital innovation, suggesting that digital initiatives are largely insulated
from short-term managerial orientations due to competitive pressures, institutional mandates, and relatively
rapid operational payoffs. These results challenge conventional assumptions that managerial short-termism
uniformly suppresses innovation, highlighting the strategic necessity of digital transformation in modern
manufacturing instead. The study contributes to sustainability and corporate governance literature by
providing robust empirical evidence on how digital capabilities drive environmental innovation while
clarifying the limited role of managerial cognition. In practice, the findings underscore the importance of
policy support for digital infrastructure and technology adoption as effective pathways to achieving longterm
corporate sustainability and green technological advancement.