Decoding the influence of servitization on green transformation in manufacturing firms: The moderating effect of artificial intelligence

This research addresses three crucial dimensions in operations management: the servitization of manufacturing, the utilization of artificial intelligence (AI) platforms, and green transformation. Employing the by-production method, we construct a metric for green transformation applicable to listed firms. Our comprehensive analytical framework integrates the resource-based view and information asymmetry theories, enabling systematic investigation into the influence of manufacturing servitization on firms' green transformation. In addition, we examine the moderating effect of AI platforms on the execution of servitization strategies. The empirical foundation of our study is an annually updated dataset of 554 manufacturing firms listed on China's A-share market. Our findings reveal a strong positive correlation between the deployment of servitization strategies and the green transformation of firms. This association withstands multiple robustness tests, including core variable substitution, outlier removal, and adjustments in clustering standard errors. Our research uncovers notable nuances. The effect of servitization on green total factor productivity is more visible for eastern and central China firms. Also, state-owned enterprises demonstrate a more conspicuous influence from servitization strategies. However, we observe a slight diminishing of this effect in firms audited by the Big Four. An essential contribution of our study is the illumination of the role AI platforms play in enhancing the efficacy of servitization. These AI platforms facilitate the creation of tailored solutions that curtail resource wastage, thus amplifying the positive effect of servitization strategies on green transformation. •Establishing a by-production model to measure green transformation•Application of servitization significantly increases green transformation for firms.•Regional heterogeneity in the effect of servitization implementation is investigated.•Employing AI reinforces the green transformation in the execution of servitization.