This paper empirically examines the efficacy of corporate digital transformation on a firm's environmental, social, and governance (ESG) decoupling. Using a sample of Chinese A-share listed firms from 2010 to 2019 and text analysis, the paper finds that digital transformation significantly alleviates ESG decoupling. Mechanism analysis reveals that this occurs by improving information processing and reducing information asymmetry. The relationship is stronger in eastern China and for firms not following GRI guidance. Economic consequence analysis suggests digital transformation promotes high-quality development by reducing ESG decoupling.
Publisher
Humanities & Social Sciences Communications
Published On
Mar 14, 2024
Authors
Xiangyu Chen, Peng Wan, Zhefeng Ma, Yu Yang
Tags
corporate digital transformation
ESG decoupling
information processing
information asymmetry
China
high-quality development
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