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Climate policy uncertainty and digital transformation of enterprise—Evidence from China

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  • Mo, Yan
  • Liu, Xiaotong

Abstract

We propose that climate policy uncertainty negatively affects the digital transformation of enterprise by using China listed firms’ data from 2010 to 2021. We find that this effect remains significant after controlling for endogeneity using climate policy uncertainty in the USA as an instrumental variable. Additionally, we consider financial constraints and free cash flows as channels through which climate policy uncertainty affects companies’ digital transformation.

Suggested Citation

  • Mo, Yan & Liu, Xiaotong, 2023. "Climate policy uncertainty and digital transformation of enterprise—Evidence from China," Economics Letters, Elsevier, vol. 233(C).
    • Handle: RePEc:eee:ecolet:v:233:y:2023:i:c:s0165176523004020
    DOI: 10.1016/j.econlet.2023.111377
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    References listed on IDEAS

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    1. Chen, Zhongfei & Xiao, Yu & Jiang, Kangqi, 2023. "The impact of tax reform on firms' digitalization in China," Technological Forecasting and Social Change, Elsevier, vol. 187(C).
    2. Xu, Guiyang & Li, Guanggui & Sun, Peibo & Peng, Dan, 2023. "Inefficient investment and digital transformation: What is the role of financing constraints?," Finance Research Letters, Elsevier, vol. 51(C).
    3. Zhao, Xin-Xin & Zheng, Mingbo & Fu, Qiang, 2022. "How natural disasters affect energy innovation? The perspective of environmental sustainability," Energy Economics, Elsevier, vol. 109(C).
    4. Miao, Qing & Popp, David, 2014. "Necessity as the mother of invention: Innovative responses to natural disasters," Journal of Environmental Economics and Management, Elsevier, vol. 68(2), pages 280-295.
    5. Dai, Zhifeng & Zhang, Xiaotong, 2023. "Climate policy uncertainty and risks taken by the bank: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 87(C).
    6. Lee, Kiryoung & Cho, Juik, 2023. "Measuring Chinese climate uncertainty," International Review of Economics & Finance, Elsevier, vol. 88(C), pages 891-901.
    7. Zhang, Yue & Ge, Mengshuai & Yang, Jiaju & Liu, Cuiying & Chen, Xi, 2023. "Controlling shareholders' equity pledge, digital finance, and corporate digital transformation," International Review of Financial Analysis, Elsevier, vol. 90(C).
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    Citations

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    Cited by:

    1. Li, Jinning & Kong, Tao & Gu, Liangliang, 2024. "The impact of climate policy uncertainty on green innovation in Chinese agricultural enterprises," Finance Research Letters, Elsevier, vol. 62(PA).
    2. Jingjing Qian & Xiaomin Zhang & Xiang-Wu Yan & Ning Xu, 2024. "Can Information Consumption Promote the Digital Transformation of Enterprises? Empirical Evidence from China," Sustainability, MDPI, vol. 16(24), pages 1-28, December.
    3. Zhirui Zhang & Yi Fu & Xiaoyin Liang & Liang Jiang, 2024. "Saying Is Believing: How Do Digital Disclosure Anomalies Affect Corporate Innovation Efficiency," Sustainability, MDPI, vol. 16(24), pages 1-15, December.
    4. Wu, Guo & Hu, Guoheng, 2024. "Asymmetric spillovers and resilience in physical and financial assets amid climate policy uncertainties: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 208(C).
    5. Cheng, Shulei & Chen, Yongtao & Wang, Kexin & Jia, Lijun, 2024. "Climate policy uncertainty influences carbon emissions in the semiconductor industry," International Journal of Production Economics, Elsevier, vol. 278(C).
    6. Huang, Qiubin & Kou, Mingting, 2024. "Does climate policy uncertainty impair or improve corporate investment efficiency?," Economics Letters, Elsevier, vol. 244(C).
    7. Fan, Jiaying & Xu, Meiling, 2024. "The power of competition: Unveiling China's digital transformation through product market dynamics," Economics Letters, Elsevier, vol. 234(C).
    8. Zou, Ziran & Fu, Jiayi & Zeng, Yeqin & Huang, Yuxuan, 2024. "Do young CEOs matter for corporate digital transformation?," Economics Letters, Elsevier, vol. 237(C).

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    More about this item

    Keywords

    Climate policy uncertainty; Digital transformation of enterprise; Free cash flow; Financial constrains;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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