Natural Environmental Change and Firm Sustainable Development in China: The Moderating Effect of Slack Resources and Digital Transformation

Shouquan Xu, Ming Tian (), Yujie Cai and Xuan Fu
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Shouquan Xu: Business School, Hohai University, Nanjing 211100, China
Ming Tian: Business School, Hohai University, Nanjing 211100, China
Yujie Cai: SKEMA Business School, China Campus, Suzhou 215123, China
Xuan Fu: Business School, Hohai University, Nanjing 211100, China

Sustainability, 2025, vol. 17, issue 9, 1-33

Abstract: The existing research lacks a comprehensive framework to explain the impact of natural environmental change on corporate sustainable development. After analyzing 2010–2023 data from 4816 Shanghai/Shenzhen A-share firms (39,271 firm-year observations), fixed-effects models reveal that natural environmental change improves financial performance but harms environmental–social performance. Absorbed slack resources weaken the positive influence of natural environmental change on financial performance and the negative influence on environmental–social performance; unabsorbed slack resources strengthen the influence of natural environmental change on financial performance but weaken the negative influence on environmental–social performance. Digital transformation diminishes the positive financial effects of natural environmental change. Findings suggest that firms should prioritize strategic slack resource allocation to manage environmental uncertainty, as digital initiatives currently demonstrate limited effectiveness in mitigating these challenges.

Keywords: natural environmental change; firm sustainable performance; slack resources; digital transformation; China (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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