The impact of environmental, social, and governance (ESG) practices on investment efficiency in China: Does digital transformation matter?

Digitalization, Spillover and Environmental, Social, and Governance Performance: Evidence From China

“…CSR proves to be a value that shareholders can trust over time, providing favorable conditions for the digital transformation of companies (Rangel-Pérez et al, 2023). ESG practices require companies to be more efficient in their investments, which inevitably calls for greater digital transformation (Lin et al, 2023). ESG can alleviate firms' financial constraints by mitigating information asymmetry, improving operating efficiency and reducing risk (Luo et al, 2023;Zhang et al, 2023), and enables investors to have a greater willingness to provide the resources and support needed for firms' digital transformation.…”

Does Environmental, Social, and Governance (ESG) Performance Improve Financial Institutions’ Efficiency? Evidence from China

“…Positive ESG information can reduce the negative impact of media reports, buffer external pressure, and lower agency costs [18]. By publicly dis-closing information about a firm's ESG-related valuable information, corporate managers demonstrate a positive attitude toward investors and stakeholders and communicate their ethical concerns, thereby improving stakeholders' perceptions of the firm's credibility and reputation and mitigating agency conflicts between managers and investors [33]. At the same time, in the presence of agency problems, resources within the firm are not effectively utilized.…”

“…First, firms with better ESG performance usually have a well-developed corporate governance structure, which helps avoid management's public-private behavior [18]. Public disclosure of information about a firm's ESG-related values can improve stakeholder perceptions of corporate credibility and reputation, and mitigate agency conflicts between managers and investors [33]. In addition, ESG performance enables the full utilization of internal funds by reducing the company's free cash flow, which in turn increases financial institutions' efficiency [32].…”

The impact of digital transformation on firms’ value: examining the role of ESG performance and the effect of information interaction

“…The pervasive adoption of social media has notably amplified corporate visibility and investor oversight, thereby minimizing lapses in corporate governance (Chen et al ., 2023), including issues such as equity dilution, equity restrictions, and breaches of information disclosure rules. The utilization of digital platforms for information sharing transcends communication barriers between departments and contributes to heightened organizational transparency (Lin et al ., 2023). The alleviation of information asymmetry through the application of digital technology (Lăzăroiu et al ., 2023), exemplified by transparency portals (Gouvea et al ., 2022), plays a pivotal role in enhancing corporate governance (Zhao and Cai, 2023).…”

“…According to Zhong and Ren (2023), emerging digital technologies inspire firms to autonomously fulfill their social responsibilities, generate value, and cater to the needs of all parties in the value chain. Digital transformation diminishes information asymmetry, heightens firms’ transparency (Tuyen et al ., 2023; Lin et al ., 2023), and exerts a further influence on corporate governance (Zhou and Li, 2023). The two-way exchange between firms and users improve user experience, thereby enhancing the performance of corporate social responsibility (CSR).…”