A Study of the Impact of Digital Transformation on Corporate ESG Performance

This study examines the effects of corporate digital transformation on the environmental, social, and governance (ESG) performance of 988 A-share companies listed on the Shanghai and Shenzhen stock exchanges from 2012 to 2022. By employing a fixed-effects model, we delve into how these transformations positively influence ESG outcomes, while acknowledging the regional disparities in these effects. Building upon this, we explore the varied influences of environmental regulationsspecifically, administrative directives and market incentiveson businesses' readiness and eagerness to undergo digital transitions. We develop two separate panel threshold regression models to assess these influences. The threshold existence tests reveal distinct single and double thresholds for the effects of each regulatory type. In light of these findings, we posit that fostering a greater number of enterprises to embrace digital transformation for enhanced ESG performance requires a collaborative effort between companies and the government to promote a balanced and sustainable development of China's economic, social, and environmental sectors.