IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v92y2024ics0301420724003404.html
   My bibliography  Save this article

Heterogenous effects of inclusive digital economy and resource distribution mismatch on corporate ESG performance in China

Author

Listed:
  • Cheng, Yiming
  • Zeng, Bo
  • Lin, Weixing

Abstract

The advent of the digital economy has given companies fresh prospects and obstacles in ESG performance. On the one hand, using digital technology can propel resource efficiency, elevate product and service excellence, and propel ecological and sustainable progress. Yet, on the other hand, the expedited growth of the digital economy has engendered quandaries encompassing resource depletion, data confidentiality, and societal impartiality, thereby presenting novel mandates for companies' ESG performance. The theoretical nexus between the digital economy and corporate ESG performance remains unconcluded. This study utilizes an intermediary effect model to examine the impact of digital economy development on the ESG performance of A-share listed companies in China from 2013 to 2020 by matching their financial report data with provincial macro-level data. The findings demonstrate a significant improvement in enterprises' ESG performance due to the development of the digital economy (digital infrastructure and governance). The development of the digital economy can enhance enterprises' ESG performance by mitigating resource mismatches. Heterogeneity analysis reveals that non-state-owned and highly market-oriented enterprises are more responsive to the development of the digital economy, resulting in a more substantial improvement in their ESG performance. The core hypothesis withstands rigorous testing, including decomposing ESG indicators, incorporating fixed effects in industries and provinces, and excluding extreme samples. This study has contributed to the advancement and enrichment of research on the relationship between the digital economy and enterprise ESG performance, offering both theoretical support and empirical evidence.

Suggested Citation

  • Cheng, Yiming & Zeng, Bo & Lin, Weixing, 2024. "Heterogenous effects of inclusive digital economy and resource distribution mismatch on corporate ESG performance in China," Resources Policy, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:jrpoli:v:92:y:2024:i:c:s0301420724003404
    DOI: 10.1016/j.resourpol.2024.104973
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420724003404
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2024.104973?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. Razzaq, Asif & Sharif, Arshian & Ozturk, Ilhan & Skare, Marinko, 2022. "Inclusive infrastructure development, green innovation, and sustainable resource management: Evidence from China’s trade-adjusted material footprints," Resources Policy, Elsevier, vol. 79(C).
    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. 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.
    4. Razzaq, Asif & Sharif, Arshian & Ozturk, Ilhan & Afshan, Sahar, 2023. "Dynamic and threshold effects of energy transition and environmental governance on green growth in COP26 framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 179(C).
    5. Ran, Qiying & Yang, Xiaodong & Yan, Hongchuan & Xu, Yang & Cao, Jianhong, 2023. "Natural resource consumption and industrial green transformation: Does the digital economy matter?," Resources Policy, Elsevier, vol. 81(C).
    6. Monica Billio & Michele Costola & Iva Hristova & Carmelo Latino & Loriana Pelizzon, 2021. "Inside the ESG ratings: (Dis)agreement and performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(5), pages 1426-1445, September.
    7. Antoncic, Madelyn, 2021. "Is ESG investing contributing to transitioning to a sustainable economy or to the greatest misallocations of capital and a missed opportunity?," Journal of Risk Management in Financial Institutions, Henry Stewart Publications, vol. 15(1), pages 6-12, December.
    8. Zhifu Mi & Jiali Zheng & Jing Meng & Jiamin Ou & Klaus Hubacek & Zhu Liu & D’Maris Coffman & Nicholas Stern & Sai Liang & Yi-Ming Wei, 2020. "Economic development and converging household carbon footprints in China," Nature Sustainability, Nature, vol. 3(7), pages 529-537, July.
    9. Zhou, Hailing & Liu, Ji, 2023. "Digitalization of the economy and resource efficiency for meeting the ESG goals," Resources Policy, Elsevier, vol. 86(PA).
    10. Pan, Wenrong & Xie, Tao & Wang, Zhuwang & Ma, Lisha, 2022. "Digital economy: An innovation driver for total factor productivity," Journal of Business Research, Elsevier, vol. 139(C), pages 303-311.
    11. Samuel Drempetic & Christian Klein & Bernhard Zwergel, 2020. "The Influence of Firm Size on the ESG Score: Corporate Sustainability Ratings Under Review," Journal of Business Ethics, Springer, vol. 167(2), pages 333-360, November.
    12. Guoyan Zeng & Linxing Lei & Ahmed Farouk, 2021. "Digital Transformation and Corporate Total Factor Productivity: Empirical Evidence Based on Listed Enterprises," Discrete Dynamics in Nature and Society, Hindawi, vol. 2021, pages 1-6, July.
    13. Wang, Xiong & Wang, Xiao & Ren, Xiaohang & Wen, Fenghua, 2022. "Can digital financial inclusion affect CO2 emissions of China at the prefecture level? Evidence from a spatial econometric approach," Energy Economics, Elsevier, vol. 109(C).
    14. Pedersen, Lasse Heje & Fitzgibbons, Shaun & Pomorski, Lukasz, 2021. "Responsible investing: The ESG-efficient frontier," Journal of Financial Economics, Elsevier, vol. 142(2), pages 572-597.
    15. Yanwei Lyu & Yahui Ge & Jinning Zhang, 2023. "The impact of digital economy on capital misallocation: evidence from China," Economic Change and Restructuring, Springer, vol. 56(5), pages 3475-3499, October.
    16. Wei Qian & Huan Liu & Fanghui Pan, 2022. "Digital Economy, Industry Heterogeneity, and Service Industry Resource Allocation," Sustainability, MDPI, vol. 14(13), pages 1-18, June.
    17. Ren, Siyu & Hao, Yu & Xu, Lu & Wu, Haitao & Ba, Ning, 2021. "Digitalization and energy: How does internet development affect China's energy consumption?," Energy Economics, Elsevier, vol. 98(C).
    18. Wu, Haitao & Ba, Ning & Ren, Siyu & Xu, Lu & Chai, Jingxia & Irfan, Muhammad & Hao, Yu & Lu, Zhi-Nan, 2022. "The impact of internet development on the health of Chinese residents: Transmission mechanisms and empirical tests," Socio-Economic Planning Sciences, Elsevier, vol. 81(C).
    19. Astadi Pangarso & Kristina Sisilia & Retno Setyorini & Yahya Peranginangin & Agni Alam Awirya, 2022. "Correction to: The long path to achieving green economy performance for micro small medium enterprise," Journal of Innovation and Entrepreneurship, Springer, vol. 11(1), pages 1-1, December.
    20. Yang, Xiaodong & Liu, Xia & Ran, Qiying & Razzaq, Asif, 2023. "How does natural resource dependence influence industrial green transformation in China? Appraising underlying mechanisms for sustainable development at regional level," Resources Policy, Elsevier, vol. 86(PA).
    21. Gao, Feng & Lin, Yijie & Zhang, Xuanming & Li, Shanhong & Lv, Yanqin, 2023. "Interconnectedness between land resource misallocation and environmental pollution: Exploring the sustainable development potential in China," Resources Policy, Elsevier, vol. 86(PB).
    22. Xiaodong Yang & Weilong Wang & Haitao Wu & Jianlong Wang & Qiying Ran & Siyu Ren, 2022. "The impact of the new energy demonstration city policy on the green total factor productivity of resource-based cities: empirical evidence from a quasi-natural experiment in China," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 66(2), pages 293-326, November.
    23. Guangyou Zhou & Lian Liu & Sumei Luo, 2022. "Sustainable development, ESG performance and company market value: Mediating effect of financial performance," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3371-3387, November.
    24. Fang, Mingyue & Nie, Huihua & Shen, Xinyi, 2023. "Can enterprise digitization improve ESG performance?," Economic Modelling, Elsevier, vol. 118(C).
    25. Ting-Ting Li & Kai Wang & Toshiyuki Sueyoshi & Derek D. Wang, 2021. "ESG: Research Progress and Future Prospects," Sustainability, MDPI, vol. 13(21), pages 1-28, October.
    26. Yingjia Zhong & Hongyan Zhao & Tianbao Yin, 2023. "Resource Bundling: How Does Enterprise Digital Transformation Affect Enterprise ESG Development?," Sustainability, MDPI, vol. 15(2), pages 1-18, January.
    27. Miao, Nana & Sharif, Arshian & Ozturk, Ilhan & Razzaq, Asif, 2023. "How do the exploitation of natural resources and fiscal policy affect green growth? Moderating role of ecological governance in G7 countries," Resources Policy, Elsevier, vol. 85(PA).
    28. Ayyub Sheikhi & Fatemeh Bahador & Mohammad Arashi, 2022. "On a generalization of the test of endogeneity in a two stage least squares estimation," Journal of Applied Statistics, Taylor & Francis Journals, vol. 49(3), pages 709-721, February.
    29. Haitao Wu & Yu Hao & Chuanzhen Geng & Weiheng Sun & Youcheng Zhou & Feiling Lu, 2023. "Ways to improve cross-regional resource allocation: Does the development of digitalization matter?," Journal of Economic Analysis, Anser Press, vol. 2(4), pages 1-30, June.
    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. Torsten Ehlers & Ulrike Elsenhuber & Kumar Jegarasasingam & Eric Jondeau, 2022. "Deconstructing ESG Scores: How to Invest with Your own Criteria," Swiss Finance Institute Research Paper Series 22-23, Swiss Finance Institute.
    2. Torsten Ehlers & Ulrike Elsenhuber & Anandakumar Jegarasasingam & Eric Jondeau, 2024. "Deconstructing ESG scores: investing at the category score level," Journal of Asset Management, Palgrave Macmillan, vol. 25(3), pages 222-244, May.
    3. Chang Liu & Zihao Xin, 2024. "Does environmental, social, and governance practice boost corporate human capital inflow in China? From the perspective of stakeholder response," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3251-3273, July.
    4. Lipeng Sun & Nur Ashikin Mohd Saat, 2023. "How Does Intelligent Manufacturing Affect the ESG Performance of Manufacturing Firms? Evidence from China," Sustainability, MDPI, vol. 15(4), pages 1-20, February.
    5. Heying Liu & Chan Lyu, 2022. "Can ESG Ratings Stimulate Corporate Green Innovation? Evidence from China," Sustainability, MDPI, vol. 14(19), pages 1-20, September.
    6. Xuan, Siyuan & Ge, Wenfeng & Yang, Ping & Zhang, Yunfeng, 2024. "Exploring digital finance, financial regulations and carbon emission nexus: New insight from resources efficiency, industrial structure and green innovation in China," Resources Policy, Elsevier, vol. 88(C).
    7. Gao, Pengfei & Li, Zhiyi & Shi, Rubiao, 2024. "Impact of natural resource dependence on green technology development: Role of digital governance in mitigating resource-curse using big data," Resources Policy, Elsevier, vol. 92(C).
    8. Zhipeng Yu & Yi Liu & Taihua Yan & Ming Zhang, 2024. "Carbon emission efficiency in the age of digital economy: New insights on green technology progress and industrial structure distortion," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4039-4057, July.
    9. Ferriani, Fabrizio, 2023. "Issuing bonds during the Covid-19 pandemic: Was there an ESG premium?," International Review of Financial Analysis, Elsevier, vol. 88(C).
    10. Sumin Hu & Qi Zhu & Xia Zhao & Ziyue Xu, 2023. "Digital Finance and Corporate Sustainability Performance: Promoting or Restricting? Evidence from China’s Listed Companies," Sustainability, MDPI, vol. 15(13), pages 1-16, June.
    11. Tan, Yafei & Zhu, Zhaohui, 2022. "The effect of ESG rating events on corporate green innovation in China: The mediating role of financial constraints and managers' environmental awareness," Technology in Society, Elsevier, vol. 68(C).
    12. Ren, Xiaohang & Zeng, Gudian & Zhao, Yang, 2023. "Digital finance and corporate ESG performance: Empirical evidence from listed companies in China," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    13. 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).
    14. Bai, Ling & Guo, Tianran & Xu, Wei & Liu, Yaobin & Kuang, Ming & Jiang, Lei, 2023. "Effects of digital economy on carbon emission intensity in Chinese cities: A life-cycle theory and the application of non-linear spatial panel smooth transition threshold model," Energy Policy, Elsevier, vol. 183(C).
    15. Wang, Zihan & Chen, Xi & Ullah, Sami & Abbas, Shujaat, 2023. "Resource curse or blessing? Evaluating the role of natural resource, social globalization, and environmental sustainability in China," Resources Policy, Elsevier, vol. 85(PA).
    16. Zhu, Bo & Wang, Yansen, 2024. "Does social trust affect firms' ESG performance?," International Review of Financial Analysis, Elsevier, vol. 93(C).
    17. Wang, Haijun & Jiao, Shuaipeng & Ge, Chen & Sun, Guanglin, 2024. "Corporate ESG rating divergence and excess stock returns," Energy Economics, Elsevier, vol. 129(C).
    18. Caterina Lucarelli & Sabrina Severini, 2024. "Anatomy of the chimera: Environmental, Social, and Governance ratings beyond the myth," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4198-4217, July.
    19. Miao, Nana & Sharif, Arshian & Ozturk, Ilhan & Razzaq, Asif, 2023. "How do the exploitation of natural resources and fiscal policy affect green growth? Moderating role of ecological governance in G7 countries," Resources Policy, Elsevier, vol. 85(PA).
    20. Razzaq, Asif & Sharif, Arshian & Ozturk, Ilhan & Yang, Xiaodong, 2023. "Central inspections of environmental protection and transition for low-carbon Chinese cities: Policy intervention and mechanism analysis," Energy Economics, Elsevier, vol. 124(C).

    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:jrpoli:v:92:y:2024:i:c:s0301420724003404. 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/30467 .

    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.