IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0325295.html
   My bibliography  Save this article

Digital transformation and corporate ESG performance: Research based on a capability-motivation dual framework

Author

Listed:
  • Cuicui Huang

Abstract

This study systematically examines the impact mechanism and heterogeneous characteristics of digital transformation (DT) on corporate environmental, social, and governance (ESG) performance, using panel data from Chinese A-share listed companies from 2010–2022. The research constructs a “capability-motivation” analytical framework based on resource dependence theory and agency theory, yielding the following conclusions. First, DT has a significant positive effect on corporate ESG performance, which is robustly verified through instrumental variables method and system GMM, among others. Second, DT enhances corporate ESG performance through the dual pathways of alleviating financing constraints (resource effect) and reducing agency costs (governance effect). Third, this promotional effect varies significantly across different lifecycle stages, being more prominent in mature and declining companies but not significant in growth-stage companies. Finally, the positive impact of DT on ESG performance is stronger in state-owned enterprises than in non-state-owned enterprises. This study integrates scattered findings in existing literature through a “capability-motivation” dual framework, providing a more systematic explanation for understanding the relationship between DT and ESG, and offering theoretical foundations and practical implications for companies to formulate differentiated digital-ESG strategies.

Suggested Citation

  • Cuicui Huang, 2025. "Digital transformation and corporate ESG performance: Research based on a capability-motivation dual framework," PLOS ONE, Public Library of Science, vol. 20(6), pages 1-27, June.
    • Handle: RePEc:plo:pone00:0325295
    DOI: 10.1371/journal.pone.0325295
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0325295
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0325295&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0325295?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Yang, Xiangyang & Li, Zijun & Qiu, Zhaoxuan & Wang, Jinmin & Liu, Bei, 2024. "ESG performance and corporate technology innovation: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 206(C).
    2. Kuntai Tu & Zongrun Li & Qi Ban & Xiaoyun Fan, 2024. "ESG Ratings, Media Sentiment, and Corporate Innovation Performance," Sustainability, MDPI, vol. 16(24), pages 1-22, December.
    3. Zhengxia He & Leyi Kuai & Jianming Wang, 2023. "Driving mechanism model of enterprise green strategy evolution under digital technology empowerment: A case study based on Zhejiang Enterprises," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 408-429, January.
    4. Luo, Chunhua & Wei, Dianlong & He, Feng, 2023. "Corporate ESG performance and trade credit financing – Evidence from China," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 337-351.
    5. Tan, Wenhao & Cai, Yaqi & Luo, Huilin & Zhou, Min & Shen, Minghao, 2024. "ESG, technological innovation and firm value: evidence from china," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    6. Li Wang & Hongyu Yang, 2024. "Digital technology innovation and corporate ESG performance: evidence from China," Economic Change and Restructuring, Springer, vol. 57(6), pages 1-32, December.
    7. Qian, Simeng, 2024. "The effect of ESG on enterprise value under the dual carbon goals: From the perspectives of financing constraints and green innovation," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 318-331.
    8. Joel F Houston & Hongyu Shan, 2022. "Corporate ESG Profiles and Banking Relationships," The Review of Financial Studies, Society for Financial Studies, vol. 35(7), pages 3373-3417.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wen, Bohui & You, Wei & Yuan, Ming, 2025. "The Impact of commercial banks' ESG performance: Difference between provocative and passive risk-taking – Evidence from China," Research in International Business and Finance, Elsevier, vol. 76(C).
    2. Yu Sang & Kannan Loganathan & Priya Sukirthanandan, 2025. "A Study on the Impact of Corporate Digital Transformation on Environmental, Social, and Governance (ESG) Performance: Mechanism Analysis Based on Resource Allocation Efficiency and Technological Gap," Sustainability, MDPI, vol. 17(8), pages 1-31, April.
    3. Jiang, Lisha & Zhou, Wei & Hualiang, Wu & Deng, Wei, 2025. "Impact of business environment uncertainty on ESG performance from the perspective of resource supply and demand based on ESG performance," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 1012-1030.
    4. Shang, Yuping & Xiao, Zisheng & Nasim, Asma & Zhao, Xin, 2025. "Influence of ESG on corporate debt default risk: An analysis of the dual risk scenarios," Journal of International Money and Finance, Elsevier, vol. 151(C).
    5. Yang, Haiyan & Tang, Feier & Hu, Fang & Yao, Daifei, 2025. "Corporate ESG performance and abnormal cash dividends," International Review of Financial Analysis, Elsevier, vol. 102(C).
    6. Wang, Meixia & Liu, Li & Liang, Tongxin, 2025. "Does the ESG disclosure quality affect financial performance: Empirical evidence from Chinese energy-listed companies," Finance Research Letters, Elsevier, vol. 77(C).
    7. Jin, Shaorong & Xiong, Ruoyu & Peng, Huan & Tang, Shiyu, 2025. "ESG performance and private enterprise resilience: Evidence from Chinese financial markets," International Review of Financial Analysis, Elsevier, vol. 98(C).
    8. Anzhu Xue & Guang Yang & Hui Wang, 2025. "The Impact of Environmental, Social, and Governance (ESG) on the Green Development of Listed Companies in China’s Agricultural and Forestry Industries," Sustainability, MDPI, vol. 17(10), pages 1-26, May.
    9. Gao, Xiang & He, Xixi & Sun, Chuanwang & Wu, Dongmei & Zhang, Jie, 2025. "Innovation in shouldering green responsibility: ESG performance and green technology innovation," Energy Economics, Elsevier, vol. 142(C).
    10. Yichun Zhang & Xinyi Zhang, 2025. "Analysis of the Influence Mechanism of Digital Transformation on the New Quality Productivity of Enterprises --The Mediating Role of Financing Constraints and ESG Ratings," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 17(2), pages 1-15, February.
    11. Xuejia Zheng & Lei Zhuang, 2025. "The Impact of Environmental Protection Tax on Green Behaviors and ESG Performance of Industrial Enterprises," Sustainability, MDPI, vol. 17(19), pages 1-18, September.
    12. Lei, Xiao & Tu, Qin, 2025. "ESG performance and innovation in listed manufacturing companies–A prospect theory perspective," Finance Research Letters, Elsevier, vol. 72(C).
    13. Yuan Li & Yongchun Huang & Yupeng Zhao & Zi Ye, 2025. "The Impact of Corporate Environmental, Social, and Governance Performance on Total Factor Productivity: An Analysis of the Moderating Effect of Environmental Uncertainty," Sustainability, MDPI, vol. 17(19), pages 1-24, September.
    14. Shen, Ling & Yang, Xiaozhong & Ma, Guangcheng, 2025. "Can companies’ participation in ESG ratings improve green innovation efficiency? Evidence from Chinese A-share listed companies," Finance Research Letters, Elsevier, vol. 78(C).
    15. Xiaoyu Cui & Baolei Qi & Muhammad Jameel Hussain, 2024. "Vendor sustainability performance and corporate customers' supplier selection," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 2910-2928, July.
    16. Fu, Tong & Qiu, Zhaoxuan & Yang, Xiangyang & Li, Zijun, 2024. "The impact of artificial intelligence on green technology cycles in China," Technological Forecasting and Social Change, Elsevier, vol. 209(C).
    17. Liu, Bei & Chen, Ziyi & Wang, Ying & Sun, Xiaolong, 2025. "Fintech empowers enterprises to practice ESG: The role of political background of executives," Energy Economics, Elsevier, vol. 142(C).
    18. Yuechen Wu, 2024. "Does ESG Consistently Promote the Corporate Financial Performance? A Study of the Global Cruise Industry," Papers 2409.00758, arXiv.org.
    19. Liu, Xiaojing & Huang, Ningren & Su, Wunhong & Zhou, Haiyan, 2024. "Green innovation and corporate ESG performance: Evidence from Chinese listed companies," International Review of Economics & Finance, Elsevier, vol. 95(C).
    20. Zhou, Weizhong & Liu, Chunlu & Zhou, Yu & Li, Qihui & Wang, Yuanhua, 2025. "The influence of environmental policy on green total factor productivity in the Chinese construction industry," LSE Research Online Documents on Economics 129092, London School of Economics and Political Science, LSE Library.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:plo:pone00:0325295. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.