Rule-of-law digital government and corporate social responsibility governance in digital firms: Evidence from China

This study examines the governance risks of digital government and the mitigating role of the rule of law. Using data on Chinese listed digital firms from 2012 to 2022, we compare how two models, digital government and rule-of-law digital government, affect digital firms’ corporate social responsibility (CSR). We find that a digital government jointly built through government–firm collaboration induces digital firms to shirk social responsibility. This result is driven by the digital Leviathan effect and weak government oversight. In essence, firms appropriate a portion of public authority, which then takes on profit-seeking characteristics and deviates from social welfare objectives. By contrast, developing a rule-of-law digital government serves as a critical institutional antidote and effectively offsets these negative effects. The mitigating effect is more pronounced among non-state-owned enterprises and among firms with stronger internal governance or stronger public scrutiny. Further analysis provides empirical support for the technological-neutrality view: the risk of the digital Leviathan does not stem from digital technologies or data resources per se, but from their application and use under weak institutional constraints. This study clarifies the social consequences of alternative digital governance models and highlights the need for process-oriented risk regulation to address governance risks in building digital government.