Digital orientation has attracted significant attention from policymakers and researchers due to its potential to drive innovation success. While prior research has largely examined the impact of digital orientation on specific types of innovation from a static lens, a holistic and dynamic perspective on its relationship with firms’ overall innovation performance remains limited. Drawing on dynamic capabilities theory, this study aims to bridge this gap by developing a moderated mediation model that incorporates the mediating role of digital capabilities and the moderating effect of environmental dynamism in the relationship between digital orientation and firms’ overall innovation performance. Using survey data from 368 Chinese firms, this study employs hierarchical regression analysis and the bootstrap method to test the hypotheses. The results indicate that digital orientation promotes digital capabilities (encompassing digital sensing, digital integrative, and digital transforming capabilities), which in turn facilitates firms’ overall innovation performance. Also, the effect of digital capabilities on innovation performance is moderated by environmental dynamism. This study contributes to the existing literature by offering a holistic and dynamic lens to elucidate the link between digital orientation and innovation performance, while also providing managerial insights for firms seeking to adopt digital orientation to boost innovation success in the evolving digital environments.

Over the past decade, artificial intelligence (AI) has been increasingly used in firm innovation. While AI has contributed to innovation improvement, direct evidence of its effectiveness in radical innovation is limited. This study fills this gap by empirically investigating the impact of AI on radical innovation and how this relationship is shaped by digital foundation and government subsidy from the perspectives of technological synergy and the external institutional environment. Using panel data from Chinese A-share listed firms from 2007 to 2023, this study empirically tests hypotheses through regression analyses. The findings reveal that AI adoption significantly promotes radical innovation, and this relationship is moderated by the characteristics of a firm’s digital foundation (i.e., degree and rate) as well as government subsidy. Specifically, a high degree of digital foundation hinders AI-driven radical innovation, while a fast rate enhances it. In addition, government subsidy strengthens the positive impact of AI adoption on radical innovation. A heterogeneity analysis further shows that both the timing (early vs. late) and pace (fast vs. slow) of AI adoption exert nuanced impacts: firms that adopt AI later and at a slower pace tend to achieve greater gains in radical innovation. This study advances research on radical innovation in the era of intelligence and provides managerial implications regarding the interplay of AI with internal digital foundation and external government subsidy.

The rise of common institutional ownership has a profound impact on corporate environmental policies, and the business environment in which the enterprises operate can significantly affect the decisions of institutional investors. This study evaluates the effect of common institutional ownership on corporate environmental responsibility disclosure (CERD) practices in Chinese manufacturing firms from the performance feedback perspective. Utilizing a sample period spanning from 2008 to 2021, the study indicates several key findings. Firstly, the presence of common institutional ownership is demonstrated to enhance the level of CERD in these firms, especially soft information on environmental responsibility. Secondly, this positive effect is amplified when positive performance expectation gaps exist. Mechanism tests reveal that under the dual pressures of common institutional investor exit threats and a negative expected performance gap, firms tend to lower their level of CERD. Conversely, synergistic effects effectively promote this disclosure. Furthermore, analysis of the impact pathway demonstrates that under such conditions, common institutional ownership exerts pressure to reduce both monetary and non-monetary private benefits accruing to management, thereby leading to optimized CERD. In addition, heterogeneity analysis indicates a more significant effect of common institutional ownership on CERD enhancement in private enterprises compared to their state-owned counterparts, particularly when positive performance expectation gaps are present.