Digital transformation of enterprises under the pressure of air pollution

Qiang Lu, Yun Shen and Kangkang Yu

Applied Economics, 2025, vol. 57, issue 41, 6554-6571

Abstract: Although the effects of air pollution on economics have been reflected in recent research, very little literature has explored whether enterprises are actively adopting digital transformation under the pressure of air pollution. Considering the serious air pollution in China and the importance of digital transformation, this study uses the panel data of Chinese A-share listed companies and air quality data, from 2014 to 2020, to investigate the impact of air pollution pressure on digital transformation. The results show that air pollution pressure forces enterprises to engage in digital transformation. The conclusion still holds after endogeneity and robustness tests. Further, a mechanism analysis indicates that air pollution pressure affects digital transformation through green cognition, green innovation, and government subsidies. Meanwhile, regional informatization positively moderates the relationship between air pollution pressure and three mechanisms. Finally, a heterogeneity analysis shows that air pollution significantly affects digital transformation in eastern regions, state-owned, capital-intensive, and technology-intensive enterprises.

Date: 2025
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DOI: 10.1080/00036846.2024.2385755

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