Digital Transformation and Corporate ESG Performance – Evidence from China

Abstract

The focal point of this paper is to study environmental, social, and governance (ESG) performance consequences of digital transformation for companies, as well as green technological innovation, corporate social responsibility, and internal control as mediating variables. A set of digital transformation indicators was developed utilizing data from 355 listed industrial companies in China between 2011 and 2019 and vector arithmetic. The study’s findings suggested that digital transformation has considerably raised ESG performance, with green technological innovation, corporate social responsibility, and internal control as significant mediating variables. The paper has several contributions; for example, it provides theoretical and empirical evidence for ESG improvement in Chinese firms and an essential factor associated with ESG performance, among others. The non-economic impacts of digital transformation on ESG performance are essential insights offered by this study. They also provide insight into these impacts’ mechanisms, including green technology, corporate social responsibility, and internal control.