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Does digital transformation reduce China's corporate pollution emission intensity?

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  • Mao, Songsheng
  • Tang, Tingfeng
  • Yang, Gongyan

Abstract

In light of the Carbon Peaking and Carbon Neutrality Goals established by the Chinese government, the reduction of pollution emission through digitization is crucial for the sustainable development for China's listed enterprises. This paper analyzes the impact of digitalization on enterprise pollution emission, using the expansion of Shapiro's enterprise pollution model. It empirically tests the effects and mechanisms of pollution emission reduction in relation to enterprise digital transformation, based on the estimated pollution emission data from Chinese A-share listed companies between 2008 and 2020. The findings indicate that digital transformation of enterprise can significantly diminish the intensity of enterprises pollution emission, with technological advancement and green innovation serving as the mechanisms by which digitalization achieves pollution reduction. In addition, heterogeneity analysis shows that the digital transformation of state-owned enterprises and heavily polluting industries yields a more significant reduction in pollution, but there is no heterogeneity in the intensity of regional environmental regulations. This paper discusses the strategies for company pollution reduction in the context of digitalization and offers guidance for enterprises to seize on the opportunities presented by technology revolution and green economic transformation.

Suggested Citation

  • Mao, Songsheng & Tang, Tingfeng & Yang, Gongyan, 2025. "Does digital transformation reduce China's corporate pollution emission intensity?," Finance Research Letters, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:finlet:v:78:y:2025:i:c:s1544612325004040
    DOI: 10.1016/j.frl.2025.107141
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    Keywords

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    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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