How Corporate Digital Transformation Affects ESG Performance: Empirical Evidence from Chinese Listed Enterprises

Jiayi Liu; Zijing Wu

doi:10.54691/kk6jw798

Authors

Jiayi Liu Ginling College, Nanjing Normal University, Nanjing, China
Zijing Wu Ginling College, Nanjing Normal University, Nanjing, China

DOI:

https://doi.org/10.54691/kk6jw798

Keywords:

Corporate digital transformation, ESG performance, nature of property rights, digital-quality integration.

Abstract

This study investigates how corporate digital transformation influences ESG performance using panel data from Chinese A-share listed firms over the period 2013–2025. A firm-level digital transformation index is constructed based on the frequency of digital-related keywords appearing in annual reports. It is found that the corporate digital transformation has a significant positive effect on ESG performance. In other words, the higher the degree of digital transformation, the better the ESG performance of enterprises. Further research proves that the impact of digital transformation on ESG performance is more significant in state-owned enterprises, large-scale enterprises and enterprises in high-tech industries. Thus, this paper verifies the value of digital transformation in empowering enterprise sustainable development, and provides an empirical basis and practical guidance for listed enterprises to optimize ESG performance with the help of digital transformation.

Downloads

Download data is not yet available.

References

[1] Atan, R., Alam, M. M., Said, J., et al. (2018). The impacts of environmental, social, and governance factors on firm performance: Panel study of Malaysian companies. Management of Environmental Quality, 29(2), 182–194.

[2] Bloom, N., Garicano, L., Sadun, R., et al. (2014). The distinct effects of information technology and communication technology on firm organization. Management Science, 60(12), 2859–2885.

[3] Chatterji, A. K., et al. (2016). Do ratings of firms converge? Implications for managers, investors and strategy researchers. Strategic Management Journal, 37(8), 1597–1614.

[4] Chiarini, A. (2021). Industry 4.0 technologies in the manufacturing sector: Are we sure they are all relevant for environmental performance? Business Strategy and the Environment, 30, 3194–3207.

[5] Da Silva, A., de Souza, T. R., & Klann, R. C. (2016). The timeliness of accounting information in Brazilian family businesses. RAE: Revista de Administração de Empresas, 56(5), 489–502.

[6] Deng, X., Kang, J. K., & Buen, S. L. (2013). Corporate social responsibility and stakeholder value maximization: Evidence from mergers. Journal of Financial Economics, 110(1), 87–109.

[7] Yang, M. J., Cheng, X. K., Sun, Q., et al. (2019). How does analyst forecast dispersion affect SEO discounts in uniform-price auction system? Evidence from investor bids in China. International Review of Economics & Finance, 63, 198–208.

[8] Zhao, Y. (2022). Mutual trust influence on the correlation between the quality of corporate internal control and the accounting information quality using deep learning assessment. Computational Intelligence and Neuroscience, 48(9), 126–135.

[9] Chen, F., & Wu, Q. C. (2025). Impact of enterprises’ ESG performance on digital transformation. Jianghan Academic, 44(05), 108–118.

[10] Chen, Y., Zhang, C. Y., & Zhou, Y. B. (2025). Digital transformation, ESG and enterprise green innovation differentiation: Substantive or strategic innovation? Study & Exploration, (10), 126–134.

[11] Han, Y. M., Hu, J., & Yu, X. R. (2024). Corporate digital transformation and ESG rating disagreement. Collected Essays on Finance and Economics, (07), 59–69.

[12] He, X. J., Sun, J. H., Zhang, Z. H., et al. (2025). A configuration study of manufacturing firm performance improvement paths under the background of digital transformation. Science and Technology Management Research, 45(13), 167–174.

[13] Hu, J., Han, Y. M., & Zhong, Y. (2023). How corporate digital transformation affects corporate ESG performance. Review of Industrial Economics, (01), 105–123.

[14] Jia, F., Long, Z. W., Gao, Y., et al. (2025). On the path of enterprise ESG performance improvement under the background of digital transformation. Finance and Accounting Monthly, (S2), 144–153.

[15] Li, J. L., Yang, Z., Chen, J., et al. (2021). Study on the mechanism of ESG promoting corporate performance: Based on the perspective corporate innovation. Science of Science and Management of S.&T., 42(09), 71–89.

[16] Liu, F. (2020). How digital transformation improve manufacturing’s productivity: Based on three influencing mechanisms of digital transformation. Finance & Economics, (10), 93–107.

[17] Liu, H., Xiao, T., & Xia, J. C. (2013). The effects of informatization in the manufacturing industry on its productivity: A study of provincial panel data based on DEA-Malmquist Index. Journal of Intelligence, 32(03), 166–172.

[18] Miu, S. P. (2025). Research on the impact of corporate digital transformation on ESG performance (Master’s dissertation, Yangzhou University).

[19] Zhang, H., Shi, Y. F., Meng, W. Y., et al. (2025). The impact of enterprise digital transformation on green technology innovation: Based on ESG perspective. Statistics & Decision, 41(15), 150–155.

[20] Qi, L. L., & Guo, F. (2024). A study of the impact of corporate digital transformation on ESG performance. Statistics & Decision, 40(23), 173–177.

[21] Qiu, M. Y., & Yin, H. (2019). An analysis of enterprises’ financing cost with ESG performance under the background of ecological civilization construction. Journal of Qualitative & Technological Economics, 36(03), 108–123.

[22] Shi, G. D., Wu, G., & Huang, J. C. (2025). Digitalization transformation and ESG performance of manufacturing enterprises-From the ESG segmentation perspective. Statistics & Decision, 41(05), 166–171.

[23] Song, H. T., Song, X. G., Sun, W., et al. (2025). Enterprise digital transformation, ESG performance and accounting information quality. Friends of Accounting, (21), 58–66.

[24] Wang, J., Hong, Z. H., Duan, Q. Q., et al. (2024). The impact and mechanism of digital transformation of heavily polluting enterprises on ESG performance. Science and Technology Management Research, 44(01), 192–205.

[25] Wang, Q. L., Lin, Y. L., & Huang, X. H. (2024). Research on the impact of corporate digital transformation on ESG performance: Based on the mediation effect of total factor productivity and green technology innovation. Management and Administration, (08), 38–45.

[26] Wang, Y. H., & Guo, Y. Z. (2023). Firm digital transformation and ESG performance: Evidence from China’s A-shared listed firms. Journal of Finance and Economics, 49(09), 94–108.

[27] Yang, K. J., & Wang, D. (2024). Research on the impact of enterprise digital transformation on ESG performance-Based on the empirical analysis of China’s new energy listed companies. Journal of Industrial Technological Economics, 43(12), 83–91.

[28] Zhang, Y. S., & Yi, C. J. (2025). Enterprise digital transformation, green innovation and ESG performance. Statistics & Decision, 41(08), 171–176.

[29] Zhang, Z. N., Qian, X. Y., & Cao, X. W. (2023). Research on the green innovation effect enterprise digital transformation: substantive innovation or strategic innovation. Industrial Economic Research, (01), 86–100.

[30] Zhou, Z. M., & Wang, X. F. (2025). Digital transformation and enterprise ESG performance: An examination based on mechanism of action and economic consequences. Friends of Accounting, (09), 78–86.

[31] Zhu, H. R., & Zhou, X. H. (2025). Research on the impact of enterprise digital transformation on ESG performance. China Journal of Commerce, 34(19), 143–148.