Exploring the Role of Digital Transformation and Breakthrough Innovation in Enhanced Performance of Energy Enterprises: Fresh Evidence for Achieving Sustainable Development Goals

Abstract

The energy sector’s digital evolution is a critical micro-reflection of the digital economy’s architecture and an essential tactical pathway for achieving sustainable development goals. However, the value of digital change in regard to how effectively energy firms’ core business functions is not yet apparent. This research utilizes textual analysis to quantify the textual intensity of energy enterprises’ digitization. Applying data gathered from A-share listed firms in Shanghai and Shenzhen from 2010 to 2021 and based upon the fixed-effects panel model and mediated effects model, we assess the impact of digitization on critical business performance and evaluate the research themes’ variability from business and geographical viewpoints using a full-sample strategy. We derive three notable findings. First, the digital development of energy enterprises significantly improves the performance of their core businesses and exhibits some fluctuating characteristics. Second, the digitization of energy enterprises greatly increases the input and output of enterprise innovation, thereby improving the efficiency of their core business in the two main ways of breakthrough innovation. Third, there is a nonlinear relationship between the performance of energy enterprises’ core businesses and their digital transformation, meaning there is just one threshold consequence that diminishes after crossing the threshold. Digital transformation enables energy companies to carry out cross-border cooperation and integrate innovative resources, thereby improving corporate performance and promoting sustainable development. This paper offers relevant insights for more effective fostering of digital transformation and can help spur enterprises to seek out distinctive and ground-breaking innovation models.