Environmental strategy and digital transformation: pathways to green innovation and sustainable performance in Vietnamese manufacturing firms

Abstract

Abstract Manufacturing firms in emerging economies face dual pressures to improve both environmental performance and digital technology adoption. Both themes have attracted extensive research attention on their own, yet few studies ask whether—and through what mechanisms—a proactive environmental strategy is associated with a stronger orientation toward both digital transformation and green innovation as parallel routes to sustainable performance. Drawing on the Resource-Based View and Dynamic Capabilities Theory, this study develops and tests an integrated model in which proactive environmental strategy is examined as an organisational-level antecedent associated with digital transformation and green innovation among Vietnamese manufacturing firms. Data from 602 manufacturing enterprises were analysed using partial least squares structural equation modelling (PLS-SEM) in SmartPLS 4. Proactive environmental strategy is positively associated with both digital transformation and green innovation, and each of these, in turn, is positively associated with sustainable performance—a pattern consistent with partial mediation. Four antecedents predict proactive environmental strategy: organisational support, dynamic environment, green transformational leadership, and stakeholder pressure. One notable null result stands out: industry type (resource-intensive versus high-technology) does not moderate the environmental-strategy-to-digital-transformation link, so this relationship appears stable across manufacturing contexts. The study contributes to theory by jointly integrating the Resource-Based View and Dynamic Capabilities Theory to explain how environmental strategy is converted into digital and innovation-based capabilities, and it offers evidence that digital transformation and green innovation function as parallel, comparably weighted mediating pathways rather than competing mechanisms in an emerging-economy manufacturing context.