Regional digitalization and corporate ESG performance

Abstract

Against the backdrop of rapid digitalization growth and deep integration with the real economy, companies are faced with more extensive and complex social responsibilities. Based on the data of 1178 A-share listed companies in China's Shanghai and Shenzhen markets from 2014 to 2021, this study empirically analyses the impact of regional digitalization on corporate ESG performance by constructing a double-difference model using the establishment of China's National Pilot Zone for the Innovative Development of the Digital Economy. This paper found that regional digital construction can improve corporate ESG performance by enhancing corporate environmental information disclosure, improving the scale of social donations, and enhancing risk resilience. In addition, the higher the level of public environmental concern in the region, the more obvious the enhancement of digital construction on corporate ESG performance. The contribution of regional digital construction to corporate ESG is also stronger in firms with high executive environmental awareness than in those with low. At the same time, this paper also responds to some scholars' questioning of corporate ESG by verifying that corporate ESG report disclosure is motivated by corporate sustainability rather than self-impression management from the dimensions of corporate management's manipulation of information and the corporate's actual environmental behavior. This paper enriches the research on the impact of the external digital environment on corporate ESG performance. It is of great significance for developing countries to promote the active participation of enterprises in ESG practices through the opportunity of digital development.