Can artificial intelligence improve enterprise environmental performance: Evidence from China.

Artificial intelligence needs to be embraced urgently by enterprises as a means to achieve green development and address the efficiency quagmire in the context of green, low-carbon and sustainable development. To estimate a corporation's pioneering progress in artificial intelligence, this paper outlines the use of web-crawling procedures to capture company related terms within yearly reports by exploring the approaches adapted to Artificial intelligence. Based on data from Chinese listed companies from 2010 to 2021, this paper empirically explores the impact and mechanism of artificial intelligence on corporate environmental performance. The results illustrate that firms' ecological performance can be greatly enhanced by the artificial intelligence with this idea remaining valid following various checks for determination strength. The results from mechanism-based assessment indicate that implementation of AI in businesses is useful for promoting green innovation process while mitigating financial risks that influences corporate environmental performance positively. The correlation between artificial intelligence and environmental performance is stronger concerning state ownership, heavily polluting, and stringent environmental regulation of firms according to heterogeneity analysis. The research shows the way that artificial intelligence affects ecosystems, alongside its mechanisms, fosters a new perspective upon artificial intelligence and environmental excellence.

ESG performance and green innovation of Chinese enterprises: Based on the perspective of financing constraints.

Sustainable development needs to rely on green innovation. Enterprise ESG performance rating to alleviate the information asymmetry between enterprises and investors, for the green innovation provides development opportunities. However, there is a lack of research on the mechanism of the two based on the perspective of financing constraints. Therefore, considering the theories of sustainable development, green innovation, financing constraints and stakeholders, the basic mechanism and non-linear mechanism of ESG and green innovation are explored, aiming to provide reference for playing the role of ESG performance in promoting green innovation. The results show that better ESG performance can significantly promote the output of green innovation, and this promoting effect exists for both high-end green innovation and low-end green innovation, and its main channel is to alleviate financing constraints. In addition, this incentive exists a double threshold of digital finance and a single threshold of enterprise scale. Perfect digital finance and larger enterprise scale will strengthen the incentive effect of enterprise ESG performance on green innovation output. Considering financing constraints, this study further clarifies the relationship between enterprises ESG performance and green innovation, enriching the theoretical framework of green innovation and offering a new pathway for advancing green innovation among Chinese enterprises.

The impact of environmental, social, and governance (ESG) rating disparities on corporate risk: The mediating role of financing constraints.

As global concerns over climate change and sustainability grow, Environmental, Social, and Governance (ESG) factors have become critical in evaluating corporate practices. In China, the increasing adoption of ESG ratings by investors has highlighted discrepancies in these ratings, which may impact corporate risk. While extensive research exists on ESG performance, the effects of ESG rating disparities on corporate risk, particularly in Chinese enterprises, remain underexplored, especially the mediating role of financing constraints. Utilizing data from Chinese A-share listed companies from 2015 to 2022, this study examines the impact of Environmental, Social, and Governance (ESG) rating disparities on corporate risk, focusing on the mediating role of financing constraints. The findings indicate that discrepancies in ESG ratings significantly increase corporate risk, particularly in non-state-owned enterprises and heavily polluting industries, while having no significant impact on state-owned enterprises. Discrepancies in governance ratings exert the greatest impact on corporate risk, underscoring the critical role of corporate governance. Financing constraints further exacerbate the impact of rating discrepancies on corporate risk. These results provide new insights into enhancing the ESG rating system and mitigating corporate risk, offering a foundation for relevant policy-making.

Shareholder heterogeneity, financing constraints, and organizational resilience: Mixed-ownership reform in Chinese private enterprises.

Private enterprise development encounters numerous challenges. China encourages state-owned enterprises to acquire equity stakes in private enterprises, thereby facilitating development of private enterprises through reverse mixed-ownership reform. To test the effectiveness of this approach, we focus on the impact of state-owned equity on the organizational resilience of private enterprises. Using empirical research methods and data from A-share listed Chinese companies from 2009 to 2022, we find that reverse mixed-ownership reform is significantly and positively correlated with the organizational resilience of private enterprises. Further analysis reveals that involvement of shareholders from state-owned enterprises can bolster the organizational resilience of private enterprises by mitigating their financing constraints. This paper extends the research on the mechanism by which a heterogeneous ownership structure can impact the organizational resilience of private enterprises and offers insights for private enterprises on how to bolster their organizational resilience through mixed-ownership reform.

Can environmental protection tax alleviate the mismatch of financing and investment maturities of heavily polluting enterprises?

The gradual implementation of environmental protection tax policies has incentivized enterprises to engage in green production, effectively promoting China's accelerated achievement of the "dual­carbon" goal. Although environmental protection tax has an important impact on the investment and financing decisions of heavily polluting enterprises (HPE), few studies have focused on the relationship between environmental protection tax and mismatch of financing and investment maturities. In this paper, we consider China's environmental protection tax reform as a "quasi-natural experiment", and utilize the data of A-share listed companies from 2013 to 2022, and use a difference-in-differences (DID) model to assess the impact of this policy on the degree of mismatch of financing and investment maturities of HPE. The study shows that the implementation of the environmental protection tax policy (EPTP) significantly reduces the investment and financing maturities mismatch of the HPE, but this effect "fails" in the high tax rate area, and the policy is difficult to reverse the financing difficulties of the enterprises with a large degree of their own investment and financing maturities mismatch. The mediation mechanism test proves the EPTP acts on the mismatch of financing and investment maturities through two paths: alleviating the financing constraints faced by enterprises and increasing external supervision pressure; the impact of the policy has a time-differentiated effect, which is weakened year by year.

The inverted U-shaped relationship between corporate social responsibility and default risk: The role of financing constraints.

With increased corporate liquidity and debt repayment pressure, CSR's "insurance" role has received more attention. We conducted a comprehensive empirical analysis of 4988 listed companies in the Chinese context during 2011-2020. Our research has three findings: First, the initial increase in CSR will lead to a rise in default risk. However, once the CSR level exceeds a specific threshold, the default risk decreases as the CSR rises. We tested the robustness of the results by replacing the explanatory and the explained variables and taking into account the lag time effect, which proved the reliability of our research conclusions. Second, the mediation analysis shows financing constraints play an important mediating role in this inverted U-shaped relationship. On the left side of the U-shape, CSR performance intensifies financing constraints, while on the right side, increasing CSR reduces financing constraints. Finally, we confirm heterogeneity in the impact of CSR on the default risk of different enterprises' ownership and size. Our study complements the current literature on the effects of CSR on default risk. We are making policymakers and stakeholders aware of the importance of mandatory CSR disclosure.

Corporate digital transformation and financing constraints: The moderating effect of institutional investors.

In the age of digitization, digital transformation has emerged as a crucial pathway for companies to achieve sustainable development. In a sample of 24,103 firm-year observations from 3,508 listed companies in China's A-share market between 2007 and 2020, we investigate the relationship between corporate digital transformation and financing constraints based on dynamic capability theory. The proportion of intangible assets dedicated to digital technology is employed as a measure of the degree of digital transformation, and the SA index is utilized to assess the level of financing constraints. The findings demonstrate that digital transformation plays a significant role in alleviating financing constraints. In addition, greater institutional ownership leads to a pronounced negative correlation between digital transformation and financing constraints. From the perspective of dynamic capability theory, this study provides empirical evidence supporting research on economic consequences associated with digital transformation. Our results may contribute towards government formulation and implementation of policies promoting digital transformation to create a supportive external environment for businesses. Companies must seize opportunities associated with digital transformation to mitigate financing constraints.

Positive impacts of green finance on environmental protection investment: Evidence from green finance reform and innovations pilot zone.

After long-term development, the global economic level has improved significantly, but environmental issues generated by early extensive development seriously threaten the survival of human beings. China, in particular, urgently needs to promote sustainable development through green finance policies. For this reason, this paper regards the 2017 eight pilot zones in five provinces for green finance reform and innovations (GFRIs) as a quasi-natural experiment, and explores whether it can encourage investment in environmental protection in heavily polluting enterprises by using difference-in-differences-in-differences (DDD) model. The paper finds that: First, GFRIs can bolster investment in environmental protection in heavy polluting enterprises. The results remain consistent after several robustness checks, covering the placebo test, PSM-DID test and so on. Second, mechanism tests find that the policy promotes environmental protection investment by alleviating financing constraints and cutting financing costs. Third, heterogeneity analysis shows that the promotion effect of GFRIs on environmental protection investment is more pronounced for provinces with higher percentages of secondary industry GDP, large-scale enterprises, and enterprises with better ESG management. This paper demonstrates the beneficial influence of GFRIs on promoting the transformation of heavy polluting enterprises and provides suggestions for the improvement of such policies.

How does green finance impact carbon emissions in China: Evidence from the fintech perspective.

In light of China's objectives for carbon peak and carbon neutrality, there is an opportunity for fintech to leverage its technological advantages and enhance its integration with green finance (GF). This can bring about enhanced coverage and precision of financial services for green industries, facilitating the transformation towards a sustainable, greener, and low-carbon real economy. We investigate how fintech development influences the carbon emission reduction effects of GF utilizing a two-way fixed effects model with a panel dataset covering 30 provinces in China from 2011 to 2020. Our findings indicate that the negative impact of GF on carbon emissions (CE) is heightened in areas with high levels of fintech development. Furthermore, we notice regional disparities in how fintech development impacts the effectiveness of GF in reducing CE. Specifically, fintech has a statistically significant impact in the central and western regions, whereas its significance is absent in the eastern region. Lastly, our mechanism analysis reveals that fintech plays a vital role in enhancing GF's capacity to mitigate CE, which is achieved through channels of promoting green technology innovation (GTI), alleviating corporate financing constraints (FC), and optimizing energy structure (ES). These findings provide compelling evidence for the positive effect of fintech on the environment and offer justification for promoting the development of fintech and GF.

Digital transformation and environmental, social, and governance greenwashing: Evidence from China.

This paper examines the relationship between digital transformation(DT) and environmental, social, and governance(ESG) greenwashing using Chinese listed companies as a sample from 2012 to 2022. Furthermore, it analyzes the enterprise and regional heterogeneity as well as the influencing mechanisms on this relationship. The research results indicate that corporate digital transformation significantly inhibits ESG greenwashing, with a more pronounced effect on companies in non-high-pollution industries, high-tech industries, and the eastern region. In addition, mechanism tests reveal that internal control and financing constraints play a partial mediating role. Digital transformation suppresses ESG greenwashing by enhancing the quality of internal control and alleviating financing constraints. The primary contribution of this paper lies in demonstrating that digital transformation can serve as a strategic tool to mitigate ESG greenwashing. This enriches the research on the outcomes of digital transformation as well as the factors influencing ESG greenwashing. The conclusions of this paper provide theoretical foundations and policy recommendations for better ESG development by enterprises and governments in emerging markets. At the same time, this paper has a certain guiding role for the introduction and implementation of policies to encourage digital transformation.

Dynamics in digital finance and its impact on SME financing.

Employing the Complex Adaptive System (CAS) framework, we analyzed the evolution of digitally transformed financial networks, underscoring the pivotal role of adaptation and learning among network participants. Government funds supporting banks and platforms in digital transformation prove more effective than direct subsidies to SMEs. Achieving sustainable development requires an optimal balance between investment and efficiency due to the impact of digitalization costs on constructing digital financial networks. The study advocates for a long-term microcredit financing mode tailored to SMEs, aiding them in maintaining financial stability. Additionally, intermediary nodes within the network, such as credit rating companies, can facilitate information sharing, thereby fostering the growth of digital financial networks. This heightened information sharing enhances the payoff for each subject and reduces financing constraints. Furthermore, the study establishes that digital financial networks can alleviate the repercussions of unforeseen events, such as the COVID-19 pandemic. Finally, empirical analysis of the Beijing University Inclusive Finance Index data and financial records of Chinese SMEs listed on the New Third Board from 2016 to 2018 confirms that digital finance can alleviate the financing constraints of SMEs. In summary, the progression of digital financial networks is intricate, necessitating a thorough comprehension of diverse factors. The government is encouraged to guide the enhancement of relevant systems and regulations, bolstering supervision, and facilitating the high-quality development of digital finance networks.

Can PM2.5 concentration reduced by China's environmental protection tax?

The responsibility of enhancing environmental quality is shouldered by China's Environmental Protection Tax (EPT), which constitutes a vital element of China's tax system greening initiative. Using the difference-in-differences (DID) method, the effects of the EPT on PM2.5 concentration were empirically examined in this study, through panel data of 218 cities in China from 2015 to 2021. The results indicate that the EPT can effectively reduce PM2.5 concentration by approximately 2.4 %, and this conclusion remained unchanged after a series of robustness tests. In the channel analysis, it can be found that the reduction of PM2.5 concentration by the EPT was achieved through the alleviation of financing constraints, technological advancements, and optimization of industrial structure. Heterogeneity analysis indicates that the negative impact of the EPT on PM2.5 concentration was more significant in northern cities, inland cities and non-national environmental protection model cities. Further analysis found that EPT has a stronger inhibitory effect on PM2.5 concentration within 100 % of tax increase. The conclusions remain consistent when spatial spillover effects of PM2.5 are taken into account. This paper provides important empirical evidence to support the effectiveness of emission reductions of EPT and provides valuable insights for the future improvement of EPT.

The impact of digital transformation on resource mismatch of Chinese listed companies.

Based on a microeconomic entity perspective, this paper empirically examines the effect of enterprise digitalization on resource mismatch. We found that, firstly, an increasing in enterprise digitalization reduces resource mismatch. Moreover, the results remain robust after considering endogeneity and changing the variable measurements. Secondly, enterprise digitalization can significantly reduce resource mismatch of private and large-scale enterprises and significantly contribute to reducing enterprise resource mismatch in low marketability regions and eastern regions. Thirdly, enterprise digital transformation can reduce resource mismatch by decreasing operating costs and financing constraints; Executive incentives can help reduce resource mismatch in the digital process of enterprises. Fourthly, the increase in enterprise digitalization contributes to an enhance in corporate social responsibility, and enterprise resource mismatch plays a mediating role in the relationship of enterprise digitalization development improving corporate social responsibility. Finally, in response to the findings of the study, the paper suggests countermeasures for regional and corporate countermeasures regarding digital development.

A study on the impact of ESG rating on green technology innovation in enterprises: An empirical study based on informal environmental governance.

Improving corporate green technology innovation is a key link in achieving green transformation and development. Compared with formal environmental regulations that force companies to carry out green innovation passively, ESG ratings under soft environmental regulations can better stimulate the internal motivation of companies. This study uses the ESG ratings of listed companies published for the first time by SynTao Green Finance as an exogenous impact. Taking China's A-share listed companies from 2011 to 2022 as a research sample, the multi-period differences-in-differences model was used to empirically test the impact of ESG rating soft supervision on corporate green technology innovation. The results show that the impact of ESG rating events as a soft market regulation has a significant positive impact on the improvement of corporate green technology innovation. This conclusion still holds after a series of robustness tests. Meanwhile, enterprise digital transformation plays a positive regulatory role. The heterogeneity test shows that the green technology innovation of state-owned enterprises is more affected by ESG ratings. Mechanism research has found that ESG rating events promote corporate green technology innovation by easing corporate financing constraints and reducing managerial myopia. Further research found that under the influence of the external environment, intensified market competition and increased attention from the capital market are also conducive to the improvement of corporate green technology innovation. This study strengthens the corporate ESG concept under the guidance of green development and provides empirical evidence for promoting corporate green transformation.

How does transition finance influence green innovation of high-polluting and high-energy-consuming enterprises? Evidence from China.

Under the impact of "double-carbon" target, transition finance has an important impact on green innovation of Chinese double-high enterprises. Using a sample of 4270 high-polluting and high-energy-consumption listed enterprises (referred to as double-high enterprises) in China from 2012 to 2021, this paper empirically examines the impact of transition finance on the green innovation of China's double-high enterprises by using a fixed-effects model. The study finds that transition finance can have a facilitating effect on green innovation in double-high enterprises. The intermediary mechanism test shows that transition finance can promote green innovation of double-high enterprises through alleviating financing constraints, increasing the level of green management, and enhancing the policy orientation effect. The heterogeneity test finds that transition finance promotes green innovation more significantly for the double-high enterprises that are state-owned, large-scale, and located in regions with high levels of intellectual property protection. Further research finds that the role of transition finance in promoting green innovation in double-high enterprises helps to promote the achievement of green development of double-high enterprises.

Can enterprise green transformation inhibit accrual earnings management? Evidence from China.

This study theoretically and empirically analyzes the impact and mechanism of corporate green transformation on accrual earnings management using a sample of China's A-share listed companies from 2015 to 2021. The results indicate that the green transformation of enterprises helps restrain accrual-based earnings management, especially accrual-based earnings management, which increases profits, and that the inhibition effect of enterprise green transformation on earnings management is more significant in high-tech and growth-stage enterprises. The mechanism test shows that corporate green transformation can inhibit accrual-based earnings management by increasing analyst follow-up and easing financing constraints. Using China's environmental tax law, promulgated in 2018, as an exogenous shock to construct the PSM-DID, the conclusion still holds after alleviating endogeneity. Further research has found that green transformations can also help inhibit real earnings management. This study provides new empirical evidence for a comprehensive understanding and evaluation of the governance role of corporate green transformation and provides a reference value for further comprehensively promoting the green transformation of Chinese enterprises and improving the quality of accounting information.

Can environmental protection tax force enterprises to improve green technology innovation?

The introduction of an environmental protection tax enables a smooth shift from the sewerage charge system to the environmental protection tax scheme. This, in turn, promotes a more sustainable development of enterprise growth, emphasizing eco-friendliness. This is of immense importance in advancing environmentally aware practices and sustainability. Based on data collected from A-share listed companies in Shanghai and Shenzhen from 2014 to 2021, this paper investigates the influence of environmental protection taxes on the advancement of green technology and the underlying mechanisms. Taking the execution of the Environmental Protection Tax Law in 2018 as a quasi-natural experiment, a double-difference model is employed to examine the causal relationship between environmental protection taxes and the adoption of green technology by companies. The findings indicate that the introduction of an environmental tax could markedly enhance the extent of green technological innovation within corporations. The evidence arising from the testing mechanism implies that such a tax can encourage firms to boost their investments in research and development, upgrade their innovative human capital, and mitigate financing limitations. The study found that there is heterogeneity in the promotion effect of the environmental protection tax on the green technological innovation of businesses in different regions and provinces with varying tax burdens and types of equity capital. Further research shows that the environmental protection tax has a greater impact on the promotion of utility model patent applications for green technology innovation. This paper presents empirical evidence to support further enhancement of the environmental protection tax system. It recommends designing the environmental protection tax policy with consideration for enterprises and local conditions and bolstering the system's capacity for guiding and stimulating enterprises' green development.

Influence of digital finance on export green-sophistication.

The export green-sophistication (EGS) is not only an important engine for the high-quality development of China's economy but also the external embodiment of the core international competitiveness and the key to resisting external competition and realizing the upgrade of the value chain. Using the database of China's digital finance development, China's A-share listed enterprises, and the China Customs database, we test the relationship between digital finance (DF) and the EGS of enterprises. It shows that DF significantly promotes listed enterprises' EGS, and compared to the depth of use of DF and digitization degree of DF, the promotion effect of coverage breadth of DF is the most significant. The heterogeneity analysis shows that the positive effect is more conspicuous for promoting the EGS in private enterprises, general trade enterprises, central and western regions' enterprises, and enterprises exporting to developed countries. The mechanism test finds that alleviating financing constraints and promoting green technological innovation are the two channels for DF to promote the enterprises' EGS. This study not only advances the understanding of the economic effects of DF but also implies the green transformation of China's exports.

Digital finance and green innovation efficiency: empirical data from Chinese listed manufacturing companies.

Amid the flourishing digital economy, digital finance overcomes the constraints of the conventional financial model and largely improves the supply efficiency and use of funds. This provides new opportunities for manufacturing corporations to improve their green innovation efficiency. Employing Chinese Shenzhen and Shanghai A-share listed manufacturing corporations between 2011 and 2021, this paper conducts an empirical analysis to study the effect of digital finance on corporate green innovation efficiency. Discoveries suggest that digital finance significantly improves manufacturing corporations' green innovation efficiency. After a few robustness tests, the results are still accurate. According to a mechanism analysis, digital finance increases the effectiveness of green innovation in manufacturing corporations by removing financing constraints. According to the heterogeneity analysis, the impact of digital finance on manufacturing corporations exhibits distinctive financial and geographical regional heterogeneity, particularly accentuated in Zhejiang Province and the central and western regions. This paper can provide a valuable reference for digital finance in supporting manufacturing corporations in green innovation ventures and improving the level of green innovation in the context of digitalization.

Impact of corporate carbon emission reduction on financing constraints.

The carbon emission reduction behaviour of enterprises is a crucial element for achieving the "double-carbon" target. Based on the panel data of China's Shanghai and Shenzhen A-share nonfinancial listed companies from 2008 to 2022, this paper explores the impact of corporate carbon emission reduction on financing constraints using the fixed effect model and further dissects the path and heterogeneity of its impact. The results show that carbon emission reduction can significantly alleviate the level of financing constraints. The path test shows that corporate carbon emission reduction alleviates financing constraints through gaining business credit, improving information transparency, and increasing government subsidies. The heterogeneity analysis shows that carbon emission reduction in less economically developed regions, non-heavily polluting industries, and nonstate-owned enterprises has a better effect on alleviating financing constraints than in economically developed regions, heavily polluting industries and state-owned enterprises. Additionally, relevant policy recommendations are put forward, which are conducive to promoting enterprises to actively reduce carbon emissions and facilitate the achievement of the dual carbon goal.