Unlocking green horizons in China: Digital industry agglomeration and corporate environmental performance

Digital industry agglomeration, characterized by the application of digital technologies and industrial clusters, has facilitated the automation, intelligence, and informatization of production processes, providing new opportunities for companies to reduce pollution emissions. Using data from the “China City Statistical Yearbooks” from 2001 to 2010, as well as the merged database of industrial enterprises and pollution enterprises, this study analyzes the impact of digital industry agglomeration on corporate pollution emissions. The results indicate that digital industry agglomeration significantly lowers corporate pollution emission levels, and this conclusion remains robust through a series of robustness and endogeneity tests. Furthermore, heterogeneity analysis reveals that the impact of digital industry agglomeration on pollution reduction is more pronounced in central and western regions, low-industrialized areas, resource-based cities, small and medium-sized cities, pollution-intensive industries, low-tech sectors, high-emission enterprises, and large enterprises. Mechanism analysis shows that digital industry agglomeration reduces pollution emissions through three front-end control mechanisms: alleviating financial constraints, promoting technological innovation, and enhancing energy utilization. However, the effects of end-of-pipe mechanisms, such as new pollution investments and pollution control equipment, are not significant. The reduction in emissions is not attributed to decreased production capacity. This study broadens our understanding of urban digital industry development and corporate green transformation, providing important theoretical insights for urban environmental governance and industrial policy formulation in developing countries.