Correlation analysis.

This paper examines whether and how digital mergers and acquisitions (hereafter, M&As) affect green innovation using a sample of Chinese manufacturing firms that have implemented digital M&As. We find that digital M&As significantly promote green innovation, with digital transformation and improved dynamic capabilities serving as the underlying mechanisms through which these effects occur. The results are robust with a battery of robustness checks. In addition, we find that digital M&As have a more significant effect on promoting green innovation among private and foreign-owned companies, large-scale companies, companies facing stronger government environmental regulations and companies in heavily polluting industries. Compared to strategic green innovation, digital M&As significantly increase the likelihood of substantive green innovation, and also significantly promote collaborative green innovation of manufacturing companies. Since promoting green innovation is not directly related to digital M&As decisions, our study mitigates the endogeneity issue existing in the current literature, providing new and robust evidence for the “Solow Paradox” from the perspective of the integration of digital resources and traditional resources.