Data assets and corporate sustainable development: evidence from ESG in China

Abstract

This paper studies the impact of data assets generated inside firms on their Environmental, Social, and Governance (ESG) performance. Using a sample of listed firms in China from 2010 to 2020, we find that firms that use data assets have better ESG performance. Further analyses show that data assets improve ESG performance by enhancing operational capacity and improving monitoring. Furthermore, the impact of data assets on ESG performance is more pronounced for firms with lower asset turnover rates, weaker market power, and higher agency costs, and in scenarios where mandatory ESG disclosure is absent and CEOs have IT-related backgrounds. This paper enriches the literature by shedding light on the role of data assets in sustainable development and corporate social value creation and has practical implications for data governance in the digital era.