Can digital innovation be a new driver of corporate sustainability?

Digital innovation enables firms to build competitive advantages and achieve sustainability. Based on data from Chinese A-share listed firms from 2014 to 2023, we explore the impact of digital innovation on corporate sustainability and the moderating effect of economic policy uncertainty. We find that digital innovation promotes corporate sustainability, with increasing economic policy uncertainty strengthening this effect. In mechanism tests, this effect occurs by improving management efficiency and mitigating managerial myopia. Heterogeneity analyses indicate that digital innovation has a greater positive effect on sustainability for firms with stronger green transformation capabilities and those facing greater marketization. Analysis of different digital innovation patents shows that utility model and invention patents contribute to corporate sustainability, unlike design patents. These findings highlight the effect of digital innovation on corporate sustainability and offer valuable insights for firms seeking to balance innovation, competitiveness and long-term sustainability.