Heterogenous effects of inclusive digital economy and resource distribution mismatch on corporate ESG performance in China

The advent of the digital economy has given companies fresh prospects and obstacles in ESG performance. On the one hand, using digital technology can propel resource efficiency, elevate product and service excellence, and propel ecological and sustainable progress. Yet, on the other hand, the expedited growth of the digital economy has engendered quandaries encompassing resource depletion, data confidentiality, and societal impartiality, thereby presenting novel mandates for companies' ESG performance. The theoretical nexus between the digital economy and corporate ESG performance remains unconcluded. This study utilizes an intermediary effect model to examine the impact of digital economy development on the ESG performance of A-share listed companies in China from 2013 to 2020 by matching their financial report data with provincial macro-level data. The findings demonstrate a significant improvement in enterprises' ESG performance due to the development of the digital economy (digital infrastructure and governance). The development of the digital economy can enhance enterprises' ESG performance by mitigating resource mismatches. Heterogeneity analysis reveals that non-state-owned and highly market-oriented enterprises are more responsive to the development of the digital economy, resulting in a more substantial improvement in their ESG performance. The core hypothesis withstands rigorous testing, including decomposing ESG indicators, incorporating fixed effects in industries and provinces, and excluding extreme samples. This study has contributed to the advancement and enrichment of research on the relationship between the digital economy and enterprise ESG performance, offering both theoretical support and empirical evidence.