Accumulate thickly to grow thinly: the U-shaped relationship between digital transformation and corporate carbon performance

Feifei Yu (), Jiayi Mao () and Qing Jiang ()
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Feifei Yu: Business School of Hohai University
Jiayi Mao: Business School of Hohai University
Qing Jiang: Business School of Hohai University

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2025, vol. 27, issue 1, No 74, 2135-2160

Abstract: Abstract The vital role that digital transformation plays in reducing carbon emissions has been made clear by the exponential growth of digital technology. Consequently, figuring out how to effectively employ digital transformation to improve carbon performance is both a significant issue for businesses and a chance for sustainable development. This research investigates the relationship between corporate digital transformation and corporate carbon performance using unbalanced panel data from A-share listed companies in Shanghai and Shenzhen from 2012 to 2020, as well as the moderating effect of the strength of local low-carbon policies. It is found that: (1) there is a significant U-shaped relationship between corporate digital transformation and carbon performance; (2) the strength of local low-carbon policies positively moderates the relationship between corporate digital transformation and carbon performance; and (3) heterogeneity analysis reveals that the U-shaped relationship between digital transformation and corporate carbon performance is more prominent among large firms, firms in heavily polluting industries, and firms with high R&D intensity, and state-owned enterprises. This study adds to the body of knowledge on the studies of carbon reduction enabled by digital transformation and serves as a guide for the development of local low-carbon policies.

Keywords: Digital transformation; Enterprises carbon performance; Local low-carbon policies; China (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10668-023-03959-7

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