Impact of Digital Transformation on ESG Performance in Manufacturing Enterprises: From the Perspective of Internal Interaction in Digital Transformation

Against the backdrop of a booming digital economy, manufacturing faces a conflict between its high energy consumption and sustainable development goals, positioning digital transformation as a key solution. Enterprise digital transformation is often categorized into management, production, and service digitalization. During transformation, it is challenging to advance all domains simultaneously, and interactions exist between them, so these effects should be considered. We use a sample of Chinese A-share listed manufacturing enterprises using data from 2012 to 2023 to investigate how digital transformations and their internal interactions affect enterprise sustainability performance (ESG performance), analyzing the differences between these effects in different types of enterprises. The findings demonstrate that digitalization across the management, production, and service domains enhances ESG performance. Significant interaction effects exist between management and production digitalization, between production and service digitalization, and across all three domains, while the interaction between management and service digitalization is insignificant. Heterogeneity analysis reveals that in private enterprises, the interaction between management and service digitalization positively affects ESG performance, whereas its effect is insignificant in state-owned enterprises. In large enterprises, interactions involving service digitalization are insignificant; in contrast, in SMEs, although service digitalization alone negatively impacts ESG, its interaction with management digitalization strengthens the latter’s positive effect. Mediation tests indicate that production efficiency partially mediates the effect of production digitalization on ESG, and innovation output mediates the effects of both management and service digitalization.