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Impact of information technology and industrial development on corporate ESG practices: Evidence from a pilot program in China

Author

Listed:
  • Jun, Xiao
  • Ai, Junwei
  • Zheng, Lingfeng
  • Lu, Meiting
  • Wang, Jianye

Abstract

In the context of China's rapid digital transformation and emphasis on sustainable development, this study explores the impact of the Pilot Program of the Integration of Informatization and Industrialization (PPII) on corporate environmental, social, and governance (ESG) practices. The research addresses the challenge of understanding how government-led digital initiatives influence sustainable business practices using an exogenous policy shock to mitigate self-selection bias and endogeneity concerns. Employing a stacked difference-in-differences method, the study finds that PPII significantly enhances ESG ratings of manufacturing firms, driven by increased green innovation and improved information quality. The positive effects are more pronounced in state-owned enterprises, large firms, firms with higher institutional ownership, and those located in central cities. This research underscores the synergy between digital transformation and sustainable development, providing empirical support for the efficacy of digital technology–led industrial policies in promoting ESG practices and achieving long-term economic and environmental goals.

Suggested Citation

  • Jun, Xiao & Ai, Junwei & Zheng, Lingfeng & Lu, Meiting & Wang, Jianye, 2024. "Impact of information technology and industrial development on corporate ESG practices: Evidence from a pilot program in China," Economic Modelling, Elsevier, vol. 139(C).
    • Handle: RePEc:eee:ecmode:v:139:y:2024:i:c:s0264999324001627
    DOI: 10.1016/j.econmod.2024.106806
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    Keywords

    Information technology; ESG practices; Green innovation; Information quality;
    All these keywords.

    JEL classification:

    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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