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Can digital finance empowerment reduce extreme ESG hypocrisy resistance to improve green innovation?

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  • Zhang, Dongyang

Abstract

The efficiency of sustainable growth has recently become a challenge attracting controversy. This paper provides a new investigation on the effect of digital finance on green innovation by solving the extreme corporate environment, social, and governance (ESG) hypocrisy resistance in firm behaviors. By constructing a unique panel of data spanning from 2013 to 2019, we draw several findings. First, our fundamental result shows that digital finance empowerment can significantly increase green innovation performance. It reveals that digital finance empowerment works efficiently by decreasing the extreme ESG hypocrisy resistance measured by greenwashing. Second, considering the heterogeneous analysis, our results indicate that digital finance empowerment better solves greenwashing issues to improve green innovation for non-state-owned firms, heavily polluting firms, and highly competitive firms. Third, concerning the mechanism's explorations, digital finance empowerment reduces extreme ESG hypocrisy resistance by alleviating financial constraints and compressing management and financial cost. Our findings suggest that regulators can accelerate the financial market's digitization, principally in pursuit of sustainable growth effects.

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  • Zhang, Dongyang, 2023. "Can digital finance empowerment reduce extreme ESG hypocrisy resistance to improve green innovation?," Energy Economics, Elsevier, vol. 125(C).
    • Handle: RePEc:eee:eneeco:v:125:y:2023:i:c:s0140988323002542
    DOI: 10.1016/j.eneco.2023.106756
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    6. Khalid, Fahad & Irfan, Muhammad & Srivastava, Mohit, 2024. "The impact of digital inclusive finance on ESG disputes: Evidence from Chinese non-financial listed companies," Technological Forecasting and Social Change, Elsevier, vol. 204(C).
    7. Chen, Zhe & Li, Xiaojing & Zhang, Jizhou & Xia, Xianli, 2024. "Does digital finance alleviate household consumption inequality? Evidence from China," Finance Research Letters, Elsevier, vol. 60(C).
    8. Xing Zhang & Mingcan Ji & Shujuan Wang, 2024. "Can Environmental, Social, and Governance Ratings Promote Green Innovation in Chinese Heavy Polluters? Perspectives from “Greening” Behaviors," Sustainability, MDPI, vol. 16(7), pages 1-23, March.
    9. Li, Yiping & Zheng, Lanxing & Xie, Chang & Fang, Jiming, 2024. "Big data development and enterprise ESG performance: Empirical evidence from China," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 742-755.
    10. Liang, Benbo & He, Gailei & Wang, Yuran, 2024. "The digital economy, market integration and environmental gains," Global Finance Journal, Elsevier, vol. 60(C).
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