IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v93y2024ipap1324-1339.html
   My bibliography  Save this article

Does a coin have only two sides? -The inverted U-shaped relationship between corporate digital transformation and carbon information disclosure and its flip-flopping

Author

Listed:
  • Chen, Hong
  • Wu, Xuying
  • Zhang, Mengyun

Abstract

This paper examines the impact of corporate digital transformation on the disclosure of carbon information, using a sample of listed companies in China's A-shares that have published social responsibility or environmental reports from 2011 to 2020. The study finds a significant inverted U-shaped correlation between the level of corporate digital transformation and the degree of carbon information disclosure. Specifically, in the nascent phase of digital transformation, enhancing the degree of transformation can facilitate the enhancement of carbon information disclosure. However, when digital transformation goes too far, the negative effects will overweight the positive ones, and level of carbon information disclosure will be inhibited. The analysis indicates that a high level of persistent green innovation capability can positively moderate the effect of corporate digitization on carbon information disclosure. That is to say, a strong persistent green innovation capability can reinforce the beneficial impact of digitization on the level of carbon information disclosure. When the persistent capability for green innovation improves and surpasses a certain threshold, it can convert the right side of the inverted U-shaped curve into a U-shaped curve. This allows for persistent improvement in the level of carbon information disclosure through further digital transformation. Further analysis indicates that enhancing internal control levels and knowledge integration capabilities can also postpone the occurrence of the inflection point on the inverted U-shaped curve.

Suggested Citation

  • Chen, Hong & Wu, Xuying & Zhang, Mengyun, 2024. "Does a coin have only two sides? -The inverted U-shaped relationship between corporate digital transformation and carbon information disclosure and its flip-flopping," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 1324-1339.
    • Handle: RePEc:eee:reveco:v:93:y:2024:i:pa:p:1324-1339
    DOI: 10.1016/j.iref.2024.04.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056024002612
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2024.04.008?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. Anders Akerman & Ingvil Gaarder & Magne Mogstad, 2015. "The Skill Complementarity of Broadband Internet," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(4), pages 1781-1824.
    2. Dong, John Qi & Netten, Jork, 2017. "Information technology and external search in the open innovation age: New findings from Germany," Technological Forecasting and Social Change, Elsevier, vol. 120(C), pages 223-231.
    3. Zhang, Cheng & Fang, Jiming & Ge, Shilong & Sun, Guanglin, 2024. "Research on the impact of enterprise digital transformation on carbon emissions in the manufacturing industry," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 211-227.
    4. Li, Xin & Shao, Xuefeng & Chang, Tsangyao & Albu, Lucian Liviu, 2022. "Does digital finance promote the green innovation of China's listed companies?," Energy Economics, Elsevier, vol. 114(C).
    5. Richard F. J. Haans & Constant Pieters & Zi-Lin He, 2016. "Thinking about U: Theorizing and testing U- and inverted U-shaped relationships in strategy research," Strategic Management Journal, Wiley Blackwell, vol. 37(7), pages 1177-1195, July.
    6. Shang, Yuping & Raza, Syed Ali & Huo, Zhe & Shahzad, Umer & Zhao, Xin, 2023. "Does enterprise digital transformation contribute to the carbon emission reduction? Micro-level evidence from China," International Review of Economics & Finance, Elsevier, vol. 86(C), pages 1-13.
    7. Paul A. Griffin & David H. Lont & Estelle Y. Sun, 2017. "The Relevance to Investors of Greenhouse Gas Emission Disclosures," Contemporary Accounting Research, John Wiley & Sons, vol. 34(2), pages 1265-1297, June.
    8. Gary Peters & Andrea Romi, 2014. "Does the Voluntary Adoption of Corporate Governance Mechanisms Improve Environmental Risk Disclosures? Evidence from Greenhouse Gas Emission Accounting," Journal of Business Ethics, Springer, vol. 125(4), pages 637-666, December.
    9. Dayuan Li & Min Huang & Shenggang Ren & Xiaohong Chen & Lutao Ning, 2018. "Environmental Legitimacy, Green Innovation, and Corporate Carbon Disclosure: Evidence from CDP China 100," Journal of Business Ethics, Springer, vol. 150(4), pages 1089-1104, July.
    10. Halil Emre Akbaş & Seda Canikli, 2018. "Determinants of Voluntary Greenhouse Gas Emission Disclosure: An Empirical Investigation on Turkish Firms," Sustainability, MDPI, vol. 11(1), pages 1-24, December.
    11. Patrick Mikalef & Ilias O. Pappas & John Krogstie & Michail Giannakos, 2018. "Big data analytics capabilities: a systematic literature review and research agenda," Information Systems and e-Business Management, Springer, vol. 16(3), pages 547-578, August.
    12. Wendy Green & Shan Zhou, 2013. "An International Examination of Assurance Practices on Carbon Emissions Disclosures," Australian Accounting Review, CPA Australia, vol. 23(1), pages 54-66, March.
    13. Walid Ben‐Amar & Philip McIlkenny, 2015. "Board Effectiveness and the Voluntary Disclosure of Climate Change Information," Business Strategy and the Environment, Wiley Blackwell, vol. 24(8), pages 704-719, December.
    14. Azlan Amran & Vinod Periasamy & Abdul Hadi Zulkafli, 2014. "Determinants of Climate Change Disclosure by Developed and Emerging Countries in Asia Pacific," Sustainable Development, John Wiley & Sons, Ltd., vol. 22(3), pages 188-204, May.
    15. Craig Deegan & Michaela Rankin, 1997. "The materiality of environmental information to users of annual reports," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 10(4), pages 562-583, October.
    16. Samuel Tang & David Demeritt, 2018. "Climate Change and Mandatory Carbon Reporting: Impacts on Business Process and Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 27(4), pages 437-455, May.
    17. Guo, Bingnan & Hu, Peiji & Lin, Ji, 2024. "The effect of digital infrastructure development on enterprise green transformation," International Review of Financial Analysis, Elsevier, vol. 92(C).
    18. Wang, Zongrun & Fu, Haiqin & Ren, Xiaohang & Gozgor, Giray, 2024. "Exploring the carbon emission reduction effects of corporate climate risk disclosure: Empirical evidence based on Chinese A-share listed enterprises," International Review of Financial Analysis, Elsevier, vol. 92(C).
    19. Yan, Huahong & Li, Xiaoyan & Huang, Ying & Li, Yuanhao, 2020. "The impact of the consistency of carbon performance and carbon information disclosure on enterprise value," Finance Research Letters, Elsevier, vol. 37(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. Halil Emre Akbaş & Seda Canikli, 2018. "Determinants of Voluntary Greenhouse Gas Emission Disclosure: An Empirical Investigation on Turkish Firms," Sustainability, MDPI, vol. 11(1), pages 1-24, December.
    2. Lily Hsueh, 2019. "Opening up the firm: What explains participation and effort in voluntary carbon disclosure by global businesses? An analysis of internal firm factors and dynamics," Business Strategy and the Environment, Wiley Blackwell, vol. 28(7), pages 1302-1322, November.
    3. Dewan Muktadir‐Al‐Mukit & Firoz Haroon Bhaiyat, 2024. "Impact of corporate governance diversity on carbon emission under environmental policy via the mandatory nonfinancial reporting regulation," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 1397-1417, February.
    4. Siddique, Md Abubakar & Akhtaruzzaman, Md & Rashid, Afzalur & Hammami, Helmi, 2021. "Carbon disclosure, carbon performance and financial performance: International evidence," International Review of Financial Analysis, Elsevier, vol. 75(C).
    5. Liu, Yang Stephanie & Zhou, Xiaoyan & Yang, Jessica Hong & Hoepner, Andreas G.F. & Kakabadse, Nada, 2023. "Carbon emissions, carbon disclosure and organizational performance," International Review of Financial Analysis, Elsevier, vol. 90(C).
    6. Le Luo & Qingliang Tang, 2021. "Corporate governance and carbon performance: role of carbon strategy and awareness of climate risk," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 2891-2934, June.
    7. Kentaro Azuma & Akira Higashida, 2024. "Climate change disclosure and evolving institutional investor salience: Roles of the Principles for Responsible Investment," Business Strategy and the Environment, Wiley Blackwell, vol. 33(4), pages 3669-3686, May.
    8. Jeanne, Amar & Demaria, Samira & Rigot, Sandra, 2023. "What are the drivers of corporates' climate transparency? Evidence from the S&P 1200 index," Ecological Economics, Elsevier, vol. 213(C).
    9. Dwi Ratmono & Darsono Darsono & Nur Cahyonowati & Triana Chaerun Niza, 2022. "Greenhouse Gas Emission Accounting Disclosure, Corporate Characteristics and Governance: An Empirical Investigation on Indonesian Firms," International Journal of Energy Economics and Policy, Econjournals, vol. 12(6), pages 86-95, November.
    10. Fulvio Castellacci & Henrik Schwabe, 2020. "Internet, unmet aspirations and the U-shape of life," PLOS ONE, Public Library of Science, vol. 15(6), pages 1-22, June.
    11. Simona Galletta & Sebastiano Mazzù & Valeria Naciti, 2021. "Banks' business strategy and environmental effectiveness: The monitoring role of the board of directors and the managerial incentives," Business Strategy and the Environment, Wiley Blackwell, vol. 30(5), pages 2656-2670, July.
    12. Ignatius Edward Riantono & Felicia Wigna Sunarto, 2022. "Factor Affecting Intentions of Indonesian Companies to Disclose Carbon Emission," International Journal of Energy Economics and Policy, Econjournals, vol. 12(3), pages 451-459, May.
    13. Mohamed Toukabri & Lamia Kalai, 2024. "How does sustainability leadership improve climate change reporting? The choices associated with a sustainable board- A management perspective," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 29(7), pages 1-48, October.
    14. Weizhou Su & Nieping Wei & Zihan Yuan & Sidai Guo, 2023. "The Impact of Environmental Information Disclosure on the Efficiency of Enterprise Capital Allocation," Sustainability, MDPI, vol. 15(14), pages 1-19, July.
    15. Palea, Vera & Drogo, Federico, 2020. "Carbon Emissions and the Cost of Debt Financing: What Role for Policy Commitment, Firm Disclosure and Corporate Governance?," Department of Economics and Statistics Cognetti de Martiis. Working Papers 202002, University of Turin.
    16. Binh Bui & Muhammad Nurul Houqe & Mahbub Zaman, 2021. "Climate change mitigation: Carbon assurance and reporting integrity," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3839-3853, December.
    17. Isabel-María García-Sánchez & Nicola Raimo & Víctor Amor-Esteban & Filippo Vitolla, 2023. "Board committees and non-financial information assurance services," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(1), pages 1-42, March.
    18. Caby, Jérôme & Ziane, Ydriss & Lamarque, Eric, 2022. "The impact of climate change management on banks profitability," Journal of Business Research, Elsevier, vol. 142(C), pages 412-422.
    19. Yang Zhang & Xinxin Zhang, 2022. "The Threshold Effect of Executive Compensation on Corporate Environmental Responsibility: Based on the Moderating Effect of Industry Competition," Sustainability, MDPI, vol. 14(14), pages 1-24, July.
    20. Caby, Jérôme & Ziane, Ydriss & Lamarque, Eric, 2020. "The determinants of voluntary climate change disclosure commitment and quality in the banking industry," Technological Forecasting and Social Change, Elsevier, vol. 161(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:reveco:v:93:y:2024:i:pa:p:1324-1339. 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/620165 .

    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.