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Do firms go digital to escape the jungle? The role of biodiversity risk in shaping digital transformation

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  • Cheong, Kasoi
  • Qiu, Kexin
  • Lin, Yongjia

Abstract

This study explores the impact of biodiversity risk on the digital transformation of heavily polluting enterprises in China. Using a sample of heavily polluting listed firms between 2011 and 2023, we show that biodiversity risk can significantly promote the digital transformation of heavily polluting enterprises. This effect is weaker for companies with greater financing constraints and is stronger among firms with greater government subsidies and higher level of digital financial inclusion. The heterogeneity analyses further reveal that non-state-owned enterprises, firms in regions with sound legal systems, and firms in more economically developed regions demonstrate a higher propensity to undertake digital transformation. Our findings highlight how biodiversity risk is converted into digital transformation decisions for heavily polluting companies under different financial and institutional conditions, thereby providing practical insight for sustainable development for China’s heavily polluting enterprises.

Suggested Citation

  • Cheong, Kasoi & Qiu, Kexin & Lin, Yongjia, 2026. "Do firms go digital to escape the jungle? The role of biodiversity risk in shaping digital transformation," Journal of Contemporary Accounting and Economics, Elsevier, vol. 22(2).
    • Handle: RePEc:eee:jocaae:v:22:y:2026:i:2:s1815566926000184
    DOI: 10.1016/j.jcae.2026.100555
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