How digital transformation affects environmental performance: evidence from Chinese construction firms

Purpose This study aims to examine the relationship between digital transformation, green innovation behavior, and environmental performance. Design/methodology/approach Grounded in resource-based view (RBV) and theory of competitive advantage (TCA), the theoretical model of the influencing mechanism and variable scales were developed through a comprehensive literature review and theoretical derivation. A total of 217 questionnaires were collected from construction firms and analyzed using confirmatory factor analysis (CFA), hierarchical regression analysis, and fuzzy set qualitative comparative analysis (fsQCA). Findings The results indicate that three dimensions of DTr—digital technology (DT), digital management (DM) and digital competence (DC)—positively affect GIB and EP. GIB significantly enhances EP, acting as a partial mediator between the three dimensions of DTr and EP. Six antecedent constructs that influence firms' EP were identified through fsQCA, and three configurations are linked to high EP outcomes, whereas the remaining three are associated with low EP outcomes. Practical implications This study offers practical guidance for policymakers and business managers to leverage DTr and GIB to mitigate the environmental impacts of the construction industry, thereby contributing to sustainable development goals. Originality/value This study makes a novel contribution by extending research on the relationship between DTr and EP to the construction industry, highlighting the role of GIB as a mediator. It comprehensively analyzes the configuration effects of various factors influencing EP. It presents a new perspective for construction firms to leverage DTr and green innovation strategies to enhance EP in the digital economy.