Digital trade and corporate ESG performance— evidence from China

Abstract

How to improve corporate ESG performance is a hot topic of interest in both academia and practice. Against the backdrop of China's strategy for “high-level opening-up,” digital trade adds new dimensions and significance to this issue.This research constructs a regional digital trade index and empirically analyzes the impact and mechanisms of digital trade on corporate ESG performance. The study finds that digital trade contributes to corporate ESG performance, a conclusion that holds after endogeneity and a series of robustness tests; digital trade enhances corporate ESG performance through green technology innovation, improving internal control quality, and facilitating digital transformation. Heterogeneity tests reveal that digital trade has a more pronounced effect on the state-owned enterprises, lower market competition industry, higher environmental regulation level region, and greater external media supervision. Further research shows that the ESG performance improvements brought by digital trade positively influence corporate total factor productivity.Based on this, it is crucial to promote regional digital trade development to enhance corporate ESG performance and achieve high-quality economic growth. This holds significant policy and practical implications for China as it seeks to realize a green transition and attain its “dual carbon” goals in the context of the global digitalization wave.