Effects of digital transformation and environmental resource integration capability on medical equipment suppliers’ green innovation performance

Framework Development

In the era of digital transformation, medical equipment providers must adapt to keep up with the innovation. The convergence of traditional medical devices with high-tech consumer electronics is leading to the development of smarter, customizable and connected products. While conventional companies leverage the ability to generate value within their organization or supply chain, digital systems rely on a collaborative ecosystem facilitated by a platform to engage with a broader range of partners and participants and create value through coordinated efforts¹⁷. The integration of digital transformation in the medical equipment supply sector is occurring silently amidst the ongoing era of innovation, as its adoption is rapidly gaining momentum. The adoption of digital transformation in medical equipment supply has stimulated managerial environmental concern. Due to the demand and appeal from various sectors of society, the academic community has also started to discuss the issues related to the digital transformation of medical equipment supply. For instance, Ângelo et al.¹⁸ pointed out that the new service is backed by dynamic QR code recognition and mobile health technology. The digital ecosystem presents opportunities for improving the quality of drug information and reconnecting drug customers with drug manufacturers. Jahankhani and Kendzierskyj¹⁹ also pointed out that in order to achieve several benefits, digital transformation must go beyond mere implementation and ensure secure and protected data exchange where several benefits can be obtained. With the growing risk of data breaches, the healthcare industry is exploring the potential benefits of block-chain technology in greater depth. Block-chain technology offers a mechanism to ensure invariance, audit trails, security, and data privacy protection, thus contributing to the improvement of healthcare transformation. Smith et al.²⁰ highlighted that the healthcare supply chain (HSC) ensures the safety and quality of healthcare services by providing healthcare organizations with Clinical Safety Evaluation Model (CSEM) through the digital transformation of its supply chain. CSEM applies a modified version of the information success models originally proposed by DeLone and McLean, along with established safety standards within the healthcare supply chain domain. While these scholars have studied issues related to digital transformation in medical equipment supply, there remains a research gap on the impact of DT on the GIP of medical equipment supply enterprises, especially regarding the influencing mechanism. Thus, there is a need to conduct a comprehensive investigation and analysis. To address these issues, this study argues that the RBV perspective provides a theoretical framework of digital transformation, environmental resource integration capability, managerial environmental concern and green innovation performance, and have empirically tested it using investigation data of a large medical equipment supply enterprise.

Specifically, based on the RBV, the focus of this research is to investigate the correlation between DT, ERIC, MEC and GIP. The research first examines the role and effect of ERIC in the correlation between DT and GIP. The findings depict that the combination of green capability and green business strategy has a positive effect on the creation of green and the development of environmentally-friendly innovation. Moreover, the creation of green value through collaboration enhances the green performance of enterprises and facilitates enterprises’ green innovation. The incorporation of ERIC not only enables enterprises to achieve green technology performance but also improves the creation of green value. Furthermore, the creation of green value through collaboration serves as a moderator in the correlation between comprehensive capability and environmentally-friendly innovation²¹. Using causal logic, it can be concluded that the environmental resource integration capability of medical equipment supply enterprises is a key factor in their green innovation performance. Also, managerial environmental concern plays an important role in determining corporate behavior performance. This study thus concludes that the effect of DT on ERIC and GIP can be influenced by managerial environmental concerns.

In summary, Fig. 1 depicts the research framework presented in this paper.

The relationship between digital transformation and green innovation performance

There is currently no unified definition for the concept of “green innovation performance”. Scholars such as, Du et al.²², Albort-Morant et al.²³, and Yang and Lin²⁴ have used the term in their research. For instance, according to Du et al.²², there is a positive correlation between green customer, supplier integration and the performance of environmentally-friendly innovation. In the manufacturing industry, Albort-Morant et al.²³ recommended that managers prioritize the strengthening of absorptive capacity to foster the generation of novel information and promote GIP. Meanwhile, Yang and Lin²⁴ emphasized the importance of collaboration within the supply chain to attain green innovation performance. This paper defines GIP as the implementation of eco-friendly design, innovative processes, and management practices by organizations, to address environmental challenges and attain specific environmental protection and sustainable development goals. It is an evaluation index of the economic and social value added to an enterprise through the development or adoption of new technologies.

From the Resource-based view (RBV) perspective, medical equipment supplies companies undergoing GIP by utilizing various of digital technologies, including big data, artificial intelligence, cloud-based solutions, block-chain and IoT. The effect of DT on environmental protection can be seen primarily in two ways. On the one hand, DT facilitates the collection of environmental protection-related information. This enables enterprises gain a better understanding of the demands of news media, government, society and customers. Based on this understanding, enterprises can make strategic decisions that align with sustainable development principles. This can also motivate them to enhance their investment in green technology to enhance GIP. On the other hand, the use of DT can foster enterprises to easily access relevant external information to better understand the needs of stakeholders and make sustainable decisions. This is instrumental in addressing the problem of information asymmetry in environmental protection technology by facilitating the acquisition of green innovation-related technologies, knowledge and other resources. This also enables medical equipment supplies enterprises to utilize new technology to undertake scientific environmental demands analysis²⁵, effectively change the inefficient supply of medical equipment model²⁶, to optimize medical resources utilization²⁷, eventually to promote medical equipment supply enterprises’ performance of green innovation²⁸.

Based on this, we propose the following hypothesis:

H1

Digital transformation has a positive effect on green innovation performance.

The mediating effect of environmental resource integration capability

With the rising importance of big data and digital technology, there has been growing emphasis on GIP and changes in the business models of medical equipment companies, which has enabled them to quickly adapt to changing market demands.

From the resource-based view (RBV) perspective, the adoption of digital transformation in medical equipment supply enterprises can benefit them in several ways. This includes improving their ability to analyze large datasets, gaining real-time insights, and promoting research and innovation, leading to positive impacts as suggested by²⁹. These benefits can be observed in two main aspects. Firstly, the Digital transformation promotes the utilization of digital technologies resource in medical equipment supply companies³⁰. Additionally, the focus of government and customs authorities on environmental protection has led to the application of cutting-edge technologies like big data, cloud computing, and artificial intelligence, allowing enterprises to search for and efficiently identify the relevant environmental resources³¹. Secondly, the adoption of digital transformation helps improve advanced innovations like big data, cloud computing and artificial intelligence. This is conducive to improving environmental resource integration capability³².

Based on this, we propose the following hypothesis:

H2

Digital transformation has a positive effect on environmental resource integration capability.

The health care service system relies significantly on medical equipment, which is essential to the global market³³. Kuo et al.³⁴ utilized the RBV and resource dependence theory (RDT) to explore the correlation between favorable environmental strategy, environmentally sustainable innovation, eco-friendly competitive edge and green core competitiveness in the hotel industry. Their findings revealed that positive environmental strategy has a favorable impact on ecological innovation, which subsequently impacts the green core competitiveness. The study also revealed that environmental resource integration capacity, which encompasses crucial elements of environmental innovation, extends to both their green innovation performance and medical equipment supply enterprises, enhancing their green innovation performance. Specifically, environmental resource integration capability promotes the green innovation performance of medical equipment supply enterprises in two ways. Firstly, this capability enables enterprises to identify key resource of green innovation such talent, technology, demand information, and policies supporting environmental protection³⁵. As a result, medical equipment suppliers can leverage this resource to enhance their green innovation performance. Secondly, environmental resource integration capability can also facilitate the efficient utilization of existing environmental technologies, funds, talents and other resources, thereby improving the efficiency of green innovation, and ultimately enhancing the GIP of companies. For instance, Miao et al.³⁶ revealed that advancement in green technology results in a relatively high level of efficiency in utilizing natural resources, with an increasing trend. The efficient utilization of natural resources creates a conducive environment for the selection of the best innovation behavior, enabling rational use of natural resources to support economic development and environmental protection. Based on these observations, we suggest the following hypothesis:

H3

Environmental resource integration capability is positively correlated to green innovation performance.

Reis et al.³⁷ find that digital revolution has become beneficial across all aspects of business operations, necessitating managers to modify their strategies in light of the new digital landscape. Environmental resource integration capability may be a crucial factor for organizations to adjust to this change. Sun and Guo³⁸ pointed out that green innovation can be considerably boosted through digital transformation by strengthening enterprises’ green innovation capability and reducing internal and external costs. This, in turn, encourages enterprises to facilitate resource exchange among stakeholders through environmental resource integration capability. This approach minimizes the risks and expenses involved in green innovation, increasing the value of green innovation, and ultimately promoting improvement in the GIP of medical equipment suppliers. Additionally, the integration of environmental resources during the digital transformation process enables managers to obtain key internal and external information, helping medical enterprises in adjusting green innovation approach and strengthening their green innovation ability to achieve GIP.

In line with these findings, we hypothesize that:

H4

Environmental resource integration capability mediates the relationship between digital transformation and green innovation performance.

The moderating role of MEC on DT and ERIC

The effect of DT on ERIC has been a widely researched topic among academics and the business community. For instance, Wu et al.³⁹ elucidated that digital capabilities can enable open innovation, but this phenomenon is influenced by various determinants both within and outside the organization, and the interaction between environmental variations and managerial digital consciousness plays a catalytic role. Additionally, Bocconcelli et al.⁴⁰ emphasized that technology has become a key operational resource in the transformation of resource integration mode. Furthermore, Mengcheng and Tuure⁴¹ argued that the use of information technology in collaborative development processes fosters social contact and enables the integration of resource. Under the background of digital transformation, managerial environmental concern plays a vital role in providing channel knowledge (one kind of resource) spillover effects, and integrating environmental resources. Thus, low managerial environmental concern in medical equipment supply enterprises weakens the efficiency of relevant knowledge resource absorption, transformation and transmission, leading to reduce the effects of digital transformation on environmental resource integration capability. Conversely, high managerial environmental concerns enhance the efficiency of relevant knowledge resource absorption, transformation and transmission, resulting in increased knowledge resource spillover effect due to digital transformation. This in turn, promotes the enhancement of environmental resource integration capability of medical equipment supply enterprises.

In line with these findings, we hypothesize that:

H5

Managerial environmental concern positively moderates the relationship between digital transformation and environmental resource integration capability.

The moderating effect of MEC on ERIC and GIP

With the rapid advancement of digital technology and its widespread adoption across industries has brought attention to the significance of the integration of environmental resources in enhancing green innovation performance. Consequently, this has become a trending research topic and area of interest across various sectors. For instance, Wu et al.³⁹ highlighted that enterprises are proactively seeking out and acquiring digital resources, leveraging their digital capabilities to manage and utilize these resources effectively, and using digital technology to foster open innovation. Qiu et al.⁴² also emphasized the relevance of the integration of environmental resources, reconstruction of resource and environmental awareness skills within the framework of environmental agility, as a mediator between green product development and competitive advantage. Furthermore, Dangelico et al.⁴³ pointed out that a company’s ability to adapt and respond to sustainability challenges involves three core processes: integrating external and internal resources and constructing and reallocating resources. These processes considerably impact transforming and improving the company’s regular sustainability capabilities and its ability to innovate with environmentally friendly solutions. Managerial environmental concern has drawn the attention of medical equipment suppliers towards environmental innovation and bolstered their support for the integration of environmental resources in the aspects of management and enterprise strategic decision-making. This enhances the channel knowledge for environmental resource integration capability, thereby amplifying its impact on green innovation performance for medical equipment suppliers. Therefore, when managerial environmental concerns are low in medical equipment supply enterprises. As a result, the amplification effect on environmental resource integration capability is small, which results in minimal impact on green innovation performance. Conversely, higher managerial environmental concerns of medical equipment supply enterprises expand the scope of knowledge acquisition and increase heterogeneity. This in turn increases the impact on environmental resource integration capability, resulting in an increased influence green innovation performance.

With respect to this, we propose the following hypothesis:

H6

Managerial environmental concern positively moderates the relationship between environmental resource integration capability and green innovation performance.