Impact of information technology and industrial development on corporate ESG practices: Evidence from a pilot program in China

Xiao Jun, Junwei Ai, Lingfeng Zheng, Meiting Lu and Jianye Wang

Economic Modelling, 2024, vol. 139, issue C

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.

Keywords: Information technology; ESG practices; Green innovation; Information quality (search for similar items in EconPapers)
JEL-codes: D22 G39 M41 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:139:y:2024:i:c:s0264999324001627

DOI: 10.1016/j.econmod.2024.106806

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