How does the digital economy empower corporate ESG? Evidence from China

Abstract

Based on the realistic background of corporate digitalization and green development, this paper explored how the digital economy can empower corporate Environmental, Social, and Corporate Governance (ESG). Taking A-share listed companies from 2011 to 2021 as a research sample, this paper used methods such as mediation effect analysis, moderating effect analysis, and endogenous testing. This paper found that the digital economy could drive the improvement of corporate ESG performance significantly, especially for the environmental and social aspects. The improvement effect is more obvious for companies with heavily pollution and green financial environments. The results of the mechanism showed that the empowerment of the digital economy to corporate ESG could be achieved through two paths: Easing financing constraints and promoting green economic development. The results showed that the digital economy could achieve deep integration with corporate environmental governance, social responsibility, and internal governance. Moreover, the digital economy could improve the level of corporate ESG through policy support and have inspirational meaning for the empowerment of the digital economy to corporate ESG.