Environmental benefits of enterprise digitalization in China

This study systematically analyzes the relationship between enterprise digitalization and environmental benefits using data from Chinese listed enterprises from 2015 to 2020. Corporate digitalization significantly improves environmental performance, which holds even after several robustness tests. Heterogeneous analysis indicates the promotion effects of digital transformation on environmental performance are more evident in state-owned enterprises, large enterprises, capital-intensive enterprises, highly polluting enterprises, enterprises with high financing constraints, and enterprises in low-marketization areas. We also explore four potential mechanisms and find that the environmental benefits of digital transformation may be due to technological progress, governance improvement, human capital accumulation, and financing cost reduction. This study offers new evidence for evaluating the sustainability of digital transformation and improving the environmental performance of enterprises.