Does Digital Transformation Contribute to Corporate Carbon Emissions Reduction? Empirical Evidence from China

Abstract

The digital transformation of enterprises is a significant catalyst for achieving cleaner production and directly affects a company’s carbon performance. This research elucidates the theoretical logic and potential impact mechanisms of digital transformation in reducing corporate carbon emissions. Second, using a panel data set of Chinese A-share listed companies from 2007 to 2020, this study quantitatively investigates the effect of corporate digital transformation on the carbon emissions intensity of businesses. The empirical results indicate that corporate digital transformation has a statistically significant negative effect on the carbon emissions intensity of Chinese firms. Several robustness tests have validated this conclusion. The heterogeneity analysis reveals that state-owned businesses, firms with high carbon intensity, and those with strong financing capacity would benefit more from digital transformation in achieving the goal of reducing carbon emissions. Furthermore, the impact of digital transformation on corporate carbon emission abatement is more prominent in industries with limited technological input and high energy consumption. At the regional level, digital transformation has a more significant impact on reducing carbon emissions in cities with stringent environmental regulation, advanced marketization, and resource-based economies. The transmission mechanism analysis confirms that improving corporate energy use efficiency, enhancing financial performance, and fostering green innovation are crucial transmission mechanisms through which digital transformation can help enterprises decrease their carbon emissions. These findings assist companies in comprehending the role of digital transformation in lowering carbon emissions and provide them with valuable insights.