Abstract
With the continuous development of digital technology, the digital economy has gradually become a vital driver of global economic growth. We investigate the impact of digital finance on corporate ESG performance using panel data of Chinese A-share listed firms from 2011 to 2020. First, we find that digital finance can significantly promote corporate ESG performance, especially environmental and social performance. Second, we empirically identify that digital finance affects corporate ESG performance through green innovation and external supervision. Third, our heterogeneity analysis shows that digital finance has a more pronounced impact on firms with low digitalization and low profitability, and firms in regulated industries and high carbon emission industries. The positive effect of digital finance is more pronounced for firms in central and western regions and non-low carbon pilot cities. Finally, our results remain robust after addressing endogeneity issues and conducting a series of robustness checks.
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