The impact of market-incentive environmental policies on enterprise digital transformation: evidence from China’s carbon emissions trading pilot programmes

Market-incentive environmental policies guide enterprises to proactively reduce emissions and undergo digital transformation by altering market signals and cost calculations, and are significant for the green economy. This study employs China’s carbon emissions trading pilot policy (Cpolicy) as a quasi-natural experiment. It uses a multi-period difference-in-differences (DID) model to analyze data on China’s A-share-listed enterprises (2010–2021). The results show that Cpolicy significantly drives enterprise digital transformation. This primarily stems from increases in goodwill, new investment, and innovation input and output triggered by Cpolicy. The effects of Cpolicy vary significantly across industries, firm sizes, and ownership types, underscoring the need for tailored policies. Furthermore, enterprise financial asset allocation and supply chain concentration show notable threshold effects; moderate levels of financial asset allocation and external collaboration enhance Cpolicy’s effectiveness. Overall, Cpolicy significantly stimulates enterprise digital transformation, but targeted measures are needed to maximise its impact.