Strategic Imperatives of ESG in Fostering Corporate Digital Innovation: a Resource-Based View

Digital innovation has become a critical force in reshaping the global competitive landscape, driving corporations to adapt to an increasingly dynamic and strategically demanding environment. Given the growing importance of digital innovation, understanding how to enhance it is crucial for maintaining corporate competitiveness. Using empirical research based on data from Chinese firms (2010–2021) and grounded in a resource-based view, this study investigates the link between ESG practices and digital innovation. Findings reveal that (1) better ESG lays the foundation for better digital innovation; (2) proactive ESG engagement facilitates the mitigation of financing constraints, providing increased financial support for sustaining long-term corporate digital innovation; and (3) the richness of ESG equip corporations with a multidimensional approach to learning, augmenting their absorptive capacity and enabling them to maintain competitiveness in the digital innovation race. This research underscores the importance of non-financial resources, offering valuable theoretical insights for corporations and societal stakeholders aiming to effectively elevate digital innovation levels, and furnishes actionable information for managerial implications.