Enterprise performance empowered by heterogeneous environmental laws: A digital economy

Ranran Li, Yue Li, Xueli Chen, Jian Wu, Malin Song and Yuanxiang Zhou

Energy Economics, 2025, vol. 142, issue C

Abstract: As the uncertainty of environmental benefits and climate change leads enterprises to misuse environmental dividends for vested interest, environmental pollution is becoming a pressing issue of global concern. Governments worldwide have instigated robust laws; however, the economic dividend brought by these laws has substantial heterogeneities, and the empirical results differ significantly. In this article, a framework of the underlying mechanism and implementation path is built with digital economy, which involves environmental regulation implementation path and enterprise performance evaluation. Panel data from provinces in China from 2014 to 2021 is used to analyse the impact of environmental regulations on corporate performance under the supervision of the digital economy. This paper creatively designs a pattern based on the environmental regulation implemented in the digitization process of enterprises. It considers heterogeneity factors, for which incentives and public participation in environmental regulations have positive impacts on corporate performance, whereas the command environmental regulation has no linear influence on corporate performance. Additionally, the ascendancy role of the digital economy varies, where the regulatory role in public-participation environmental regulation is most evident. This study can provide a reference for government law formulation, environmental regulation choices, and a guideline for corporate response to external institutional pressures.

Keywords: Environmental laws; Digital economy; Enterprise performance; Enterprise environmental governance; Environment, Social, and Governance (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:142:y:2025:i:c:s0140988325000106

DOI: 10.1016/j.eneco.2025.108187

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