Can urban low-carbon transitions promote enterprise digital transformation?

Xinmin Chen, Yuhong Huang and Yajia Gao

Finance Research Letters, 2024, vol. 59, issue C

Abstract: To address the escalating environmental issues and foster the progress of green development, the Chinese government has initiated the low-carbon city pilot (LCCP) policy since 2010. Assessing the effects of this extensive and multifaceted environmental policy holds substantial theoretical and practical significance, particularly in terms of scrutinizing its impact on enterprise digital transformation (EDT). This study uses the LCCP as a quasi-natural experiment, utilizing the data obtained from Chinese listed companies spanning from 2007 to 2019, and empirically discovers that the LCCP can indeed stimulate enterprises to implement digital transformation strategies. After undergoing a series of robustness checks, including placebo tests and the instrumental variable method, the result obtained was still strongly supported. Heterogeneity tests reveal that the aforementioned conclusion is more typical for samples of non-state-owned and high-tech enterprises. A further mechanistic analysis indicates that the LCCP promotes EDT through two channels: encouraging enterprises to increase R&D expenditure and focusing on improving the resource allocation efficiency. This research, based on the empirical data obtained from China, enriches our understanding of the economic consequences of employing environmental regulations, and also offers valuable insights for other nations into formulating urban emission reduction measures to reap more policy benefits.

Keywords: Environmental regulation; Urban low-carbon transition; Digital economy; Enterprise digital transformation (search for similar items in EconPapers)
JEL-codes: D22 O33 Q58 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612323011790
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:59:y:2024:i:c:s1544612323011790

DOI: 10.1016/j.frl.2023.104807

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().