Technology meets sustainability: impacts of digital environmental regulation on corporate employment

Digital environmental regulation, as a key policy instrument in the era of accelerating digital transformation, fosters both innovation and sustainable development. Drawing on data from A-share listed firms in China from 2011 to 2023, this study uses the ‘Green Shield Program’ as a quasi-natural experiment to examine the employment effects of digital environmental regulation. The findings show that such regulation significantly increases employment. Further analysis reveals that the positive impact is more pronounced among non-state-owned enterprises, firms with lighter tax burdens, lower financing constraints, and those in high-tech industries. Mechanism analysis indicates that digital environmental regulation promotes employment growth by easing liquidity constraints, curbing managerial short-termism, and fostering technological innovation. This study provides empirical evidence on the economic effects of digital environmental regulation and offers significant insights for the formulation of global digital environmental regulations.