Digital finance and corporate environmental violations

Fahad Khalid, Xinhui Sun, Rabia Akram and Mohit Srivastava

Finance Research Letters, 2024, vol. 66, issue C

Abstract: Using a sample of 1048 A-share listed firms for the period 2011–2020, we analyze the direct and indirect pathways through which digital finance shapes environmental governance mechanisms within corporations. Our findings reveal that digital finance mitigates environmental violations through information (internal control) and financial (environmental investment) mechanisms. The primary findings remain consistent after using battery of robustness tests. Moreover, the negative influence of digital finance on environmental violations is more pronounced for state-owned firms, heavy polluters, and firms operating in regions with stringent environmental regulations. Overall, this research contributes valuable insights into the firm-level consequences of digital finance integration and emphasizes the importance of robust regulatory frameworks for environmental sustainability in the digital age.

Keywords: Digital finance; Environmental sustainability; Violation (search for similar items in EconPapers)
JEL-codes: Q56 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:66:y:2024:i:c:s1544612324007049

DOI: 10.1016/j.frl.2024.105674

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