Can Green Fiscal Policies Drive the Digital Transformation of Enterprises?

This paper investigates the impact of green fiscal policies on the digital transformation of enterprises and its underlying mechanisms. Utilizing data from Chinese A-share listed enterprises spanning 11 years from 2006 to 2017 and employing a multiple-period differences-in-differences method, we analyze the “Comprehensive Demonstration City of Fiscal Policies for Energy Conservation and Emission Reduction” pilot program implemented in 30 Chinese cities from 2011 to 2014 as a quasi-natural experiment. Our findings reveal that the pilot program significantly promoted the digital transformation of enterprises, with this effect remaining robust after parallel trend, placebo, and robustness tests. Further heterogeneity tests indicate that the promotion effect is more pronounced for non-state-owned enterprises, those with high financing constraints, technology-intensive and capital-intensive enterprises, high-tech enterprises, and enterprises located in the eastern and central regions. Additionally, we identify three key mechanisms through which the pilot policies influenced enterprise digital transformation: the promotion of green technology innovation, the demand for green environmental information disclosure, and the driving force of green financial development. The research conclusions not only offer compelling evidence for government-led environmental protection and governance but also provide policy recommendations on how to optimize the effectiveness of green fiscal policies.