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Digital Finance Promotes Corporate ESG Performance: Evidence from China

Author

Listed:
  • Yalin Mo

    (School of Economics, Guangxi University, Nanning 530004, China
    Guangxi Development Strategy Institute, Nanning 530004, China)

  • Yuchen Che

    (School of Economics, Guangxi University, Nanning 530004, China)

  • Wenqiao Ning

    (School of Economics, Guangxi University, Nanning 530004, China)

Abstract

Whether and how digital finance can promote corporate environmental, social, and governance (ESG) development has become an important issue. Based on panel data from listed companies in the Shanghai and Shenzhen stock markets from 2011 to 2017, this paper investigates whether and how digital finance can promote the ESG performance of Chinese companies. The empirical results indicate that digital finance not only promotes the ESG performance of Chinese companies but also indirectly facilitates it by alleviating their financing constraints. Channel tests reveal that digital finance predominantly facilitates corporate ESG development through the promotion of social performance and corporate governance performance, but it does not contribute to corporate ESG development by promoting corporate environmental performance. Further research finds that digital finance more strongly promotes ESG in enterprises in the eastern region, state-owned enterprises, small enterprises, and polluting enterprises. Finally, this article puts forward some policy recommendations for high-quality economic development in China, such as driving “ESG financial innovation” to make full use of the enabling role of digital finance in corporate ESG development, effectively bringing enterprises’ attention to environmental performance development and guiding digital finance to promote ESG development in the western region and in non-state-owned enterprises.

Suggested Citation

  • Yalin Mo & Yuchen Che & Wenqiao Ning, 2023. "Digital Finance Promotes Corporate ESG Performance: Evidence from China," Sustainability, MDPI, vol. 15(14), pages 1-23, July.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:14:p:11323-:d:1198724
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    References listed on IDEAS

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    2. Zhengyong Zhang & Jiayi You, 2024. "Does firms' ESG information disclosure have contagion effect? Evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3274-3296, July.
    3. Xu Wang & Hanhan Han & Mengfei Zhao & Shengliang Deng, 2025. "Impact of Female Executive Power on Corporate ESG Performance: The Mediating Role of Managerial Self‐Interest," Business Strategy and the Environment, Wiley Blackwell, vol. 34(8), pages 11083-11105, December.
    4. Shuke Fu & Yingchen Ge & Guopeng Wang & Jiali Tian & Jiachao Peng & Jia Xiao, 2026. "The impact of digital finance on trade credit: empirical evidence from the Yangtze River Economic Belt," Economic Change and Restructuring, Springer, vol. 59(1), pages 1-47, February.
    5. Bin Zhang & Yi Yi & Chavi Chi-Yun Fletcher-Chen & Pengyu Zou & Zhaohua Wang, 2025. "Sustainable operations in electric vehicles’ sharing: behavioral patterns and carbon emissions with digital technologies," Annals of Operations Research, Springer, vol. 355(2), pages 2373-2396, December.
    6. Richard Yeaw Chong Seow, 2026. "Evolving Transparency: How Family Control Shapes ESG Disclosure Across Corporate Life Cycle," Sustainable Development, John Wiley & Sons, Ltd., vol. 34(2), pages 2279-2299, April.
    7. Gomaa Agag & Sameh Aboul-Dahab & Sherif El-Halaby & Said Abdo & Mohamed A. Khashan, 2025. "Leveraging Digitalization to Boost ESG Performance in Different Business Contexts," Sustainability, MDPI, vol. 17(15), pages 1-31, July.
    8. Wang, Jiaqi & Yang, Rui, 2025. "The interrelation of criminal compliance, fintech, and corporate ESG," Finance Research Letters, Elsevier, vol. 85(PC).
    9. Hantao Liu & Xiaoyun Zhang & Yang He, 2025. "Digital Transformation and ESG Performance—Empirical Evidence from Chinese Listed Companies," Sustainability, MDPI, vol. 17(13), pages 1-23, July.
    10. Li, Zengfu & Yu, Zhijun & Yang, Zhihao & Ding, Zijia, 2025. "Specialization in Bank Lending and short-term debt for long-term use: Evidence from China," Finance Research Letters, Elsevier, vol. 75(C).
    11. Caterina Morelli & Simone Boccaletti & Paolo Maranzano & Philipp Otto, 2025. "Multidimensional Spatiotemporal Clustering – An Application to Environmental Sustainability Scores in Europe," Environmetrics, John Wiley & Sons, Ltd., vol. 36(2), March.
    12. Rongjia Su & Dianjie Liang, 2025. "How Digital Finance Shapes ESG Outcomes: The Mediating Roles of Productivity and Analyst Coverage," Sustainability, MDPI, vol. 17(21), pages 1-18, October.

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