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Corporate Digital Transformation and Environmental Performance: Evidence from the People’s Republic of China

Author

Listed:
  • Yan Luo

    (Fudan University)

  • Shula Wu

    (Fudan University)

  • Shu Tian

    (Asian Development Bank)

Abstract

This paper examines the impact of corporate digital transformation on environmental performance and the underlying mechanisms. Utilizing textual analysis of annual reports, we develop a fourdimensional measure of digital transformation comprising technological, business, manufacturing, and operational aspects. Analyzing data from Chinese A-share listed firms between 2009 and 2022, we demonstrate that corporate digital transformation significantly enhances environmental performance. While all dimensions of digital transformation contribute positively, manufacturing digital transformation exhibits the most substantial impact, followed by operational and technological digital transformation. We identify that green innovation, strengthened environmental monitoring and communication, increased environmental information transparency, and greater external attention are pivotal mechanisms through which digital transformation affects environmental performance, with transparency emerging as the strongest factor in this context. This paper offers new insights into the role of digital transformation in advancing sustainability.

Suggested Citation

  • Yan Luo & Shula Wu & Shu Tian, 2026. "Corporate Digital Transformation and Environmental Performance: Evidence from the People’s Republic of China," ADB Economics Working Paper Series 853, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:023024
    DOI: 10.22617/WPS260286-2
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    Keywords

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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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