From symbolic to substantive: The threshold role of green innovation in digital transformation for carbon reduction

Corporate decarbonization is critical for achieving global climate goals. However, the environmental outcome of corporate digital transformation (DT) remains theoretically contested. Grounded in strategic legitimacy theory, this study proposes and tests a symbolic-to-substantive mechanism where green innovation (GI) nonlinearly mediates the DT–decarbonization relationship. Using a novel firm-level DT index, based on annual reports of Chinese listed firms over 2008–2019, this study found that DT significantly reduced corporate carbon emissions (CE). Furthermore, its environmental impact was critically mediated by GI in a nonlinear, threshold-dependent manner. This mediation shows a threshold effect: GI raises CE for symbolic compliance; however, it shifts to substantive decarbonization after reaching 15 green patents. This legitimacy-driven pathway is pronounced in state-owned enterprises, large-scale firms, and firms in the growing and mature periods. The findings reconcile contradictory evidence in the literature and provide a basis for designing phased, firm-type-differentiated environmental policies.