IDEAS home Printed from https://ideas.repec.org/a/eee/ecmode/v139y2024ics0264999324001627.html
   My bibliography  Save this article

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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264999324001627
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econmod.2024.106806?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Claude Francoeur & Faten Lakhal & Safa Gaaya & Itidel Ben Saad, 2021. "How do powerful CEOs influence corporate environmental performance?," Post-Print hal-02976839, HAL.
    2. Zhang, Jiawei & Li, Yuan & Xu, Hanwen & Ding, Yi, 2023. "Can ESG ratings mitigate managerial myopia? Evidence from Chinese listed companies," International Review of Financial Analysis, Elsevier, vol. 90(C).
    3. Jun Qi & Qinwei Chi & Ni Yang & Junyan Ouyang, 2023. "The Impact of the Tone of a Prospectus on IPO Underpricing: Evidence from China," Australian Accounting Review, CPA Australia, vol. 33(4), pages 375-390, December.
    4. Gunnar Friede & Timo Busch & Alexander Bassen, 2015. "ESG and financial performance: aggregated evidence from more than 2000 empirical studies," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 5(4), pages 210-233, October.
    5. Paolo Capelli & Federica Ielasi & Angeloantonio Russo, 2021. "Forecasting volatility by integrating financial risk with environmental, social, and governance risk," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(5), pages 1483-1495, September.
    6. Wei Shi & Brian L. Connelly & Robert E. Hoskisson, 2017. "External corporate governance and financial fraud: cognitive evaluation theory insights on agency theory prescriptions," Strategic Management Journal, Wiley Blackwell, vol. 38(6), pages 1268-1286, June.
    7. Ren, Xiaohang & Zeng, Gudian & Sun, Xianming, 2023. "The peer effect of digital transformation and corporate environmental performance: Empirical evidence from listed companies in China," Economic Modelling, Elsevier, vol. 128(C).
    8. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and Taxation: Theory and Evidence," American Economic Review, American Economic Association, vol. 99(4), pages 1145-1177, September.
    9. Li, Rui & Xu, Shoufu & Zhang, Yun, 2023. "Can digital transformation reduce within-firm pay inequality? Evidence from China," Economic Modelling, Elsevier, vol. 129(C).
    10. Ruwei Zhao & Ruixin Fan & Xiong Xiong & Jianli Wang & Jitka Hilliard, 2023. "Media Tone and Stock Price Crash Risk: Evidence from China," Mathematics, MDPI, vol. 11(17), pages 1-14, August.
    11. Xiaomeng Chen & Meiting Lu & Yaowen Shan & Yizhou Zhang, 2021. "Australian evidence on analysts' cash flow forecasts: issuance, accuracy and usefulness," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(1), pages 3-50, March.
    12. Po-Hsin Ho & Yu-Chun Wang & Chih-Yung Lin, 2015. "Do political connections matter to bondholders? Evidence from China," Applied Economics Letters, Taylor & Francis Journals, vol. 22(15), pages 1240-1245, October.
    13. Ramírez-Correa, Patricio & Grandón, Elizabeth E. & Rondán-Cataluña, F. Javier, 2020. "Users segmentation based on the Technological Readiness Adoption Index in emerging countries: The case of Chile," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    14. Li, Ziyang & Chen, Yanjun & Li, Yanlin, 2023. "Top management abnormal turnover and stock price crash risk: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 89(C).
    15. María del Mar Miras‐Rodríguez & Francisco Bravo‐Urquiza & Bernabé Escobar‐Pérez, 2020. "Does corporate social responsibility reporting actually destroy firm reputation?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1947-1957, July.
    16. Wang, Xinyue & Cao, Yuqiang & Feng, Zhuoan & Lu, Meiting & Shan, Yaowen, 2023. "Local FinTech development and stock price crash risk," Finance Research Letters, Elsevier, vol. 53(C).
    17. Li, Wanfu & Jiang, Mengmeng & Zhang, Xuejiao & Wang, Yu & Qu, Xiaoyi, 2023. "Does foreign experience of top management affect corporate environmental responsibility? Evidence from China," Economic Modelling, Elsevier, vol. 122(C).
    18. Francoeur, Claude & Lakhal, Faten & Gaaya, Safa & Ben Saad, Itidel, 2021. "How do powerful CEOs influence corporate environmental performance?," Economic Modelling, Elsevier, vol. 94(C), pages 121-129.
    19. Amore, Mario Daniele & Bennedsen, Morten, 2016. "Corporate governance and green innovation," Journal of Environmental Economics and Management, Elsevier, vol. 75(C), pages 54-72.
    20. Francesco Campanella & Luana Serino & Anna Crisci & Antonello D'Ambra, 2021. "The role of corporate governance in environmental policy disclosure and sustainable development. Generalized estimating equations in longitudinal count data analysis," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(1), pages 474-484, January.
    21. Shoudong Chen & Yueshan Li, 2023. "Targeted Poverty Alleviation And Stock Price Crash Risk: Evidence From China," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 68(04), pages 1271-1301, June.
    22. Xin Wang & Haiyan Jiang & Meiting Lu, 2019. "Does the Reporting Location of Other Comprehensive Income Matter? The Investor's Perspective," Australian Accounting Review, CPA Australia, vol. 29(3), pages 546-555, September.
    23. Li, Zhe & Wang, Bo & Wu, Tianlong & Zhou, Dan, 2021. "The influence of qualified foreign institutional investors on internal control quality: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 78(C).
    24. Chen, Jing & Liu, Xinghe & Ou, Fenghao & Lu, Meiting & Wang, Peipei, 2023. "Green lending and stock price crash risk: Evidence from the green credit reform in China," Journal of International Money and Finance, Elsevier, vol. 130(C).
    25. Xie, Linlin & Liu, Guangqiang & Liu, Boyang, 2023. "Patent pledge policy and stock price crash risk: Evidence from China," Research in International Business and Finance, Elsevier, vol. 65(C).
    26. Zhang, Li & Liu, Chengyi & Zhang, Jinjin & Ke, Jinjun & Yuan, Jiayue, 2023. "Party leadership, corporate governance and stock price crash risk: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 88(C).
    27. Sreedhar T. Bharath & Paolo Pasquariello & Guojun Wu, 2009. "Does Asymmetric Information Drive Capital Structure Decisions?," The Review of Financial Studies, Society for Financial Studies, vol. 22(8), pages 3211-3243, August.
    28. Wei Jiang & Meiting Lu & Yaowen Shan & Tingting Zhu, 2016. "Evidence of Avoiding Working Capital Deficits in Australia," Australian Accounting Review, CPA Australia, vol. 26(1), pages 107-118, March.
    29. Erik Brynjolfsson & Lorin M. Hitt, 2003. "Computing Productivity: Firm-Level Evidence," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 793-808, November.
    30. Wang, Yizhi & Lin, Yongjia & Fu, Xiaoqing & Chen, Songhe, 2023. "Institutional ownership heterogeneity and ESG performance: Evidence from China," Finance Research Letters, Elsevier, vol. 51(C).
    31. Jang, Ga-Young & Kang, Hyoung-Goo & Kim, Woojin, 2022. "Corporate executives’ incentives and ESG performance," Finance Research Letters, Elsevier, vol. 49(C).
    32. Hans B. Christensen & Luzi Hail & Christian Leuz, 2021. "Mandatory CSR and sustainability reporting: economic analysis and literature review," Review of Accounting Studies, Springer, vol. 26(3), pages 1176-1248, September.
    33. Rui Albuquerque & Yrjö Koskinen & Chendi Zhang, 2019. "Corporate Social Responsibility and Firm Risk: Theory and Empirical Evidence," Management Science, INFORMS, vol. 65(10), pages 4451-4469, October.
    34. Zhu, Qing & Ma, Dan & He, Xin, 2023. "Digital transformation and firms' pollution emissions," Technological Forecasting and Social Change, Elsevier, vol. 197(C).
    35. Fang, Mingyue & Nie, Huihua & Shen, Xinyi, 2023. "Can enterprise digitization improve ESG performance?," Economic Modelling, Elsevier, vol. 118(C).
    36. Kothari, S.P. & Leone, Andrew J. & Wasley, Charles E., 2005. "Performance matched discretionary accrual measures," Journal of Accounting and Economics, Elsevier, vol. 39(1), pages 163-197, February.
    37. Niu, Yuhao & Wang, Sai & Wen, Wen & Li, Sifei, 2023. "Does digital transformation speed up dynamic capital structure adjustment? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    38. Yuqiang Cao & Zhe Zhang & Ke Peng & Lihua Liu & Meiting Lu, 2023. "The Establishment of Circuit Courts and Corporate Fraud," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 59(8), pages 2600-2616, June.
    39. He, Yu & Zhao, Xiaoling & Zheng, Huan, 2023. "How does the environmental protection tax law affect firm ESG? Evidence from the Chinese stock markets," Energy Economics, Elsevier, vol. 127(PA).
    40. Jiang, Yahan & Wang, Cai & Li, Sha & Wan, Jing, 2022. "Do institutional investors' corporate site visits improve ESG performance? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 76(C).
    41. Chen, Zhiwu & Cao, Yuqiang & Feng, Zhuoan & Lu, Meiting & Shan, Yaowen, 2023. "Broadband infrastructure and stock price crash risk: Evidence from a quasi-natural experiment," Finance Research Letters, Elsevier, vol. 58(PA).
    42. Cai, Cen & Tu, Yongqian & Li, Zhi, 2023. "Enterprise digital transformation and ESG performance," Finance Research Letters, Elsevier, vol. 58(PD).
    43. Cheng Lai & Meiting Lu & Yaowen Shan, 2013. "Has Australian financial reporting become more conservative over time?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 53(3), pages 731-761, September.
    44. Alberto Abadie, 2005. "Semiparametric Difference-in-Differences Estimators," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 1-19.
    45. Akbar, Saeed & Kharabsheh, Buthiena & Poletti-Hughes, Jannine & Shah, Syed Zulfiqar Ali, 2017. "Board structure and corporate risk taking in the UK financial sector," International Review of Financial Analysis, Elsevier, vol. 50(C), pages 101-110.
    46. Wu, Keping & Fu, Yumei & Kong, Dongmin, 2022. "Does the digital transformation of enterprises affect stock price crash risk?," Finance Research Letters, Elsevier, vol. 48(C).
    47. Chen, Tao & Harford, Jarrad & Lin, Chen, 2015. "Do analysts matter for governance? Evidence from natural experiments," Journal of Financial Economics, Elsevier, vol. 115(2), pages 383-410.
    48. He, Kang & Chen, Wanyi & Zhang, Liguang, 2021. "Senior management's academic experience and corporate green innovation," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    49. Roger L. Burritt & Stefan Schaltegger & Katherine Leanne Christ, 2023. "Environmental Management Accounting – Developments Over the Last 20 years from a Framework Perspective," Australian Accounting Review, CPA Australia, vol. 33(4), pages 336-351, December.
    50. Wang, Qiong & Qiu, Muqing, 2023. "Minority shareholders' activism and stock price crash risk: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 87(C).
    51. Liu, Ningyue & Laing, Elaine & Cao, Yue & Zhang, Xiaofei, 2018. "Institutional ownership and corporate transparency in China," Finance Research Letters, Elsevier, vol. 24(C), pages 328-336.
    52. Baker, Andrew C. & Larcker, David F. & Wang, Charles C.Y., 2022. "How much should we trust staggered difference-in-differences estimates?," Journal of Financial Economics, Elsevier, vol. 144(2), pages 370-395.
    53. Callaway, Brantly & Sant’Anna, Pedro H.C., 2021. "Difference-in-Differences with multiple time periods," Journal of Econometrics, Elsevier, vol. 225(2), pages 200-230.
    54. Tian, Guangning & Li, Bo & Cheng, Yue, 2022. "Does digital transformation matter for corporate risk-taking?," Finance Research Letters, Elsevier, vol. 49(C).
    55. Wang, Haijun & Jiao, Shuaipeng & Bu, Kun & Wang, Yebin & Wang, Yaxian, 2023. "Digital transformation and manufacturing companies’ ESG responsibility performance," Finance Research Letters, Elsevier, vol. 58(PB).
    56. Yonggen Luo & Na Tian & Deli Wang & Wenqi Han, 2024. "Does Digital Transformation Enhance Firm’s ESG Performance? Evidence from an Emerging Market," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 60(4), pages 825-854, March.
    57. Liu, Changqing & Li, Lei, 2021. "Place-based techno-industrial policy and innovation: Government responses to the information revolution in China," China Economic Review, Elsevier, vol. 66(C).
    58. Meiting Lu & Yaowen Shan & Sue Wright & Yimeng Yu, 2020. "Operating cash flow asymmetric timeliness in Australia," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(S1), pages 587-627, April.
    59. Zhao, Xiaoxia & Cai, Lianghui, 2023. "Digital transformation and corporate ESG: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PA).
    60. Shu, Hao & Tan, Weiqiang, 2023. "Does carbon control policy risk affect corporate ESG performance?," Economic Modelling, Elsevier, vol. 120(C).
    61. Zhu, Jianhua & Sun, Yanming, 2020. "Dynamic modeling and chaos control of sustainable integration of informatization and industrialization," Chaos, Solitons & Fractals, Elsevier, vol. 135(C).
    62. Eliwa, Yasser & Aboud, Ahmed & Saleh, Ahmed, 2021. "ESG practices and the cost of debt: Evidence from EU countries," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 79(C).
    63. Zhang, Dongyang, 2023. "Does green finance really inhibit extreme hypocritical ESG risk? A greenwashing perspective exploration," Energy Economics, Elsevier, vol. 121(C).
    64. Kong, Xiaowei & Jin, Yifan & Liu, Lihua & Xu, Jialu, 2023. "Firms' exposures on COVID-19 and stock price crash risk: Evidence from China," Finance Research Letters, Elsevier, vol. 52(C).
    65. Francesco Gangi & Lucia Michela Daniele & Nicola Varrone & Francesca Vicentini & Maria Coscia, 2021. "Equity mutual funds' interest in the environmental, social and governance policies of target firms: Does gender diversity in management teams matter?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(3), pages 1018-1031, May.
    66. Lei, Ni & Miao, Qin & Yao, Xin, 2023. "Does the implementation of green credit policy improve the ESG performance of enterprises? Evidence from a quasi-natural experiment in China," Economic Modelling, Elsevier, vol. 127(C).
    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. Chen, Wenrui & Chen, Zhiwu & Qin, Ling & Shan, Yaowen & Xu, Weihang, 2024. "Strategic alliance, agency problems, and labor investment efficiency," Economic Modelling, Elsevier, vol. 139(C).
    2. Kim, J.H. John & Anderson, Ronald, 2024. "CEO narcissism and the agency cost of debt," Journal of Empirical Finance, Elsevier, vol. 77(C).
    3. Wang, Zhen & Tang, Pei, 2024. "Substantive digital innovation or symbolic digital innovation: Which type of digital innovation is more conducive to corporate ESG performance?," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 1212-1228.
    4. Zeng, Yongliang & Zhao, Xiangfang & Zhu, Yiwen, 2023. "Equity incentives and ESG performance: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PC).
    5. Yan, Kai & Chen, Zhiwu & Wang, Jingang & Wang, Peipei & Liang, Weiming, 2023. "The power from folk monitoring: Leading Officials’ Natural Resources Accountability Audit (NRAA) and corporate ESG performance," Finance Research Letters, Elsevier, vol. 58(PC).
    6. Jingzhuo Yu & Yong-Sik Hwang, 2024. "The Interaction Effects of Board Independence and Digital Transformation on Environmental, Social, and Governance Performance: Complementary or Substitutive?," Sustainability, MDPI, vol. 16(20), pages 1-26, October.
    7. Zhang, Dongyang, 2023. "Does green finance really inhibit extreme hypocritical ESG risk? A greenwashing perspective exploration," Energy Economics, Elsevier, vol. 121(C).
    8. Wu, Dan & Dai, Xingyu & Zhao, Ruikun & Cao, Yaru & Wang, Qunwei, 2023. "Pass-through from temperature intervals to China's commodity futures’ interval-valued returns: Evidence from the varying-coefficient ITS model," Finance Research Letters, Elsevier, vol. 58(PA).
    9. Deli Wang & Ke Peng & Kaiye Tang & Yewei Wu, 2022. "Does Fintech Development Enhance Corporate ESG Performance? Evidence from an Emerging Market," Sustainability, MDPI, vol. 14(24), pages 1-21, December.
    10. Zhang, Kaixia & Bu, Caiqi, 2024. "Top managers with information technology backgrounds and digital transformation: Evidence from small and medium companies," Economic Modelling, Elsevier, vol. 132(C).
    11. Tian, Lichuan & Sun, Kai & Yang, Jie & Zhao, Yang, 2024. "Does digital economy affect corporate ESG performance? New insights from China," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 964-980.
    12. Li, Wentao & Li, Xue & Peng, Lanying & Ning, Chong, 2024. "Silent actions: Digital transformation in private enterprises with state equity participation," Finance Research Letters, Elsevier, vol. 65(C).
    13. Hoang, Thi Hong Van & Pham, Linh & Nguyen, Thanh Thi Phuong, 2023. "Does country sustainability improve firm ESG reporting transparency? The moderating role of firm industry and CSR engagement," Economic Modelling, Elsevier, vol. 125(C).
    14. Xue, Yi & Zhang, Xinzhi, 2024. "Digital transformation and corporate capital structure: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 84(C).
    15. Xijia Huang & Yiting Guo & Yuming Lin & Liping Liu & Kai Yan, 2022. "Green Loans and Green Innovations: Evidence from China’s Equator Principles Banks," Sustainability, MDPI, vol. 14(20), pages 1-20, October.
    16. Schoonjans, Eline, 2024. "From diversity to sustainability: Environmental and social spillover effects of board gender quotas," Journal of Economic Behavior & Organization, Elsevier, vol. 222(C), pages 314-331.
    17. Das, Kuntal K. & Yaghoubi, Mona, 2024. "Migration fear and stock price crash risk," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 91(C).
    18. Liu, Lihua & Cao, Lele & Cao, Yuqiang & Lu, Meiting & Shan, Yaowen, 2024. "VAT credit refunds and firm productivity: Evidence from China's VAT reform," International Review of Financial Analysis, Elsevier, vol. 93(C).
    19. Ballester, Laura & González-Urteaga, Ana & Shen, Long, 2024. "Green bond issuance and credit risk: International evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 94(C).
    20. Wang, Xiaolin & Ye, Yingying, 2024. "Environmental protection tax and firms’ ESG investment: Evidence from China," Economic Modelling, Elsevier, vol. 131(C).

    More about this item

    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

    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:eee:ecmode:v:139:y:2024:i:c:s0264999324001627. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30411 .

    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.