Unlocking the Digital Dividend: How Does Digitalization Promote Corporate Carbon Emission Reduction?

Leifeng Zhang, Hui Wu () and Yang Shen
Additional contact information
Leifeng Zhang: Institute of Quantitative Economics and Statistics, Huaqiao University, Xiamen 361021, China
Hui Wu: School of Economics and Management, Nanjing Forestry University, Nanjing 210037, China
Yang Shen: Institute of Quantitative Economics and Statistics, Huaqiao University, Xiamen 361021, China

Sustainability, 2025, vol. 17, issue 16, 1-21

Abstract: Although digitalization offers new pathways for carbon reduction, its underlying mechanisms have not been fully explored. Unlike previous studies, this research investigates the impact of digitalization on corporate carbon performance through both technological and structural effects while also revealing the boundary conditions under which digitalization contributes to carbon reduction in the context of corporate financing constraints. We conducted an empirical analysis using a fixed-effects model and a partially linear functional-coefficient model based on data from A-share listed companyies in China from 2008 to 2023. The results show that digitalization is significantly and positively associated with corporate carbon performance, confirming its potential for emission reduction. Mechanism tests indicated that digitalization improves corporate carbon performance by enhancing technological absorptive capacity, promoting factor substitution, and optimizing resource allocation. Further analysis revealed that, under financing constraints, the marginal effect of digitalization on corporate carbon performance follows an “inverted U-shaped” curve. Our study enriches the literature on the digital economy and carbon emissions and provides both theoretical and practical insights for promoting the coordinated transformation of enterprises toward digitalization and low-carbon development.

Keywords: digitalization; financing constraints; corporate carbon performance; sustainable development (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/17/16/7222/pdf (application/pdf)
https://www.mdpi.com/2071-1050/17/16/7222/ (text/html)

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:gam:jsusta:v:17:y:2025:i:16:p:7222-:d:1721321

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().