Organizational Capability: The Key to Unlocking Green Innovation Benefits From the Industrial Internet

ABSTRACT Green innovation in manufacturing is crucial to achieving global carbon neutrality and sustainable development. The Industrial Internet, a pivotal technology in the global industrial transformation, can enable green transitions and significantly improve corporate green innovation. However, its effectiveness significantly varies, and the general mechanisms determining its success remain unexplored. From an organizational capability perspective, this study examines this globally relevant issue using data from Chinese listed manufacturing companies from 2008 to 2023. A further analysis reveals that the empowering effect critically depends on organizational capability and exhibits a double‐threshold effect. As the organizational capability strengthens, the Industrial Internet's positive impact becomes more significant. Theoretically, this study defines organizational capability as a mechanism and critical boundary condition, advancing the understanding of how digital technologies enable green innovation. It also provides corporate managers with a strategic framework to assess the risks and returns of digital transformation, guiding them to prioritize capability building. It also offers scientific evidence for governments to design precise industrial policies to optimize public resource allocations and accelerate green transitions in global manufacturing.