Alignment of words and actions? Government environmental attention and enterprise digital transformation

This study employs a unique dataset of A-share listed companies from 2007 to 2021 to investigate the impact of government environmental attention on enterprise digital transformation (EDT) and its underlying mechanisms. Empirical findings document that in response to upholding organizational legitimacy, government environmental attention remarkably favors EDT. This core conclusion remains robust after addressing endogeneity concerns and alternative robustness tests. Mechanism analysis unveils that intensified government environmental attention propels companies to expedite green technology innovation, alleviate financing constraints, and enhance human capital quality, all accelerating EDT. Subsequent investigations indicate that heightened government environmental attention notably impacts EDT more for larger plants and highly polluting industries. In regions with lower financial development, government environmental attention serves as a reliable signaling mechanism, motivating EDT. These findings guide plants in accelerating EDT for enhanced sustainable development while shedding light on the evolving mechanisms of government attention allocation and EDT, which offers insights for future research on the correlation between government actions and corporate environmental governance.