Abstract: Green innovation is a key way to achieve high-quality economic development, and how to promote green innovation in heavily polluting enterprises in the digital economy era is an important theoretical and practical problem that urgently needs to be solved. This paper selects the matching data of urban digital economy and China's Shanghai and Shenzhen A-share heavily polluting listed companies from 2011 to 2019, and uses the fixed effect model to analyze the impact, channels and economic consequences of digital economy development on green innovation of heavily polluting enterprises. Research findings: (1) The development of the digital economy has significantly promoted green innovation in heavily polluting enterprises, and this promotion effect is sustained. (2) The development of the digital economy reduces financing constraints, encouraging enterprises to increase investments in research and development as well as environmental protection, thereby fostering green innovation activities. (3) Further analysis shows that the high level of attention from external stakeholders, including the government, the public, and investors, has enhanced the driving force for corporate green transformation, making the development of the digital economy increasingly significant in promoting corporate green innovation. (4) The green innovation driven by the development of the digital economy not only brings economic benefits to heavily polluting enterprises, but also does not increase the risk of their stock price collapse. This article provides a new perspective for studying the impact of digital economy development on green innovation of heavily polluting enterprises, and also provides policy references for exploring the path to enhance green innovation of heavily polluting enterprises.

Key words: digital economy, green innovation, external stakeholders, heavy polluting enterprises