The impact of digital inclusive finance on ESG disputes: Evidence from Chinese non-financial listed companies

Abstract

In the dynamic landscape of corporate sustainability, this study sheds light on the transformative role of digital inclusive finance (DIF) in fostering sustainable practices and responsible corporate behavior. The study employs a unique dataset consisting of Chinese nonfinancial A-share listed firms for the period 2017–2020. The findings demonstrate a significant positive relationship between DIF and the mitigation of environmental, social and governance (ESG) disputes. Moreover, the mechanism analysis reveals that DIF mitigates ESG disputes by reducing financial constraints and improving internal control. The heterogeneity results show that the impact of DIF on corporate ESG disputes is more pronounced for firms located in underdeveloped regions, belongs to sensitive industrial sectors, low industrial competition, and high environmental uncertainty. The research findings provide several implications for policymakers, regulators and managers seeking to navigate the intersection of finance, sustainability and corporate responsibility in digital era.