Digital finance and corporate ESG

This study investigates the effect of digital finance on corporate environment, social and gover-nance (ESG). Using a large sample of Chinese listed firms over the period 2011-2020, we find that digital finance positively affects corporate ESG performance, which remains robust after a series of robustness checks. We also find that digital finance enhances the ESG by mitigating corporate financial constraints. In addition, the positive effect of digital finance on corporate ESG perfor-mance is more pronounced in non-state-owned firms, small-sized firms, firms with lower level of marketization, and firms located in the central and western regions of China. Overall, we provide a timely assessment of the social value of digital finance in emerging countries like China from the new perspective of ESG.

Automated summary

This study examines the impact of digital finance on corporate environment, social, and governance (ESG) using a large sample of Chinese listed firms from 2011 to 2020. The findings indicate a positive relationship between digital finance and corporate ESG performance, which is robust even after controlling for various factors. Additionally, the study reveals that digital finance helps alleviate corporate financial constraints and enhances ESG. Moreover, the positive effect of digital finance on ESG performance is more pronounced in non-state-owned firms, small-sized firms, firms with lower marketization levels, and firms located in the central and western regions of China.