Abstract
This study examines the impact of market-based environmental regulation on corporate digital transformation, using China’s carbon emission trading pilot policy as a representative initiative. Analyzing data from Shanghai and Shenzhen A-share listed companies between 2009 and 2020 through a multi-period difference-in-differences (DID) approach with two-way fixed effects, we investigate the underlying mechanisms. By developing a comprehensive evaluation framework encompassing five technological dimensions—artificial intelligence, big data, cloud computing, blockchain, and digital technology applications—we find that market-based environmental regulation significantly promotes corporate digital transformation, demonstrating a robust positive causal relationship.
To ensure reliability, our findings withstand a series of robustness checks, including parallel trend tests, placebo tests, PSM-DID estimations, and variable replacement tests. Heterogeneity analysis reveals substantial variations in policy effects: the promoting effect on state-owned enterprises is approximately twice as strong as that on non-state-owned enterprises. Furthermore, while the policy significantly enhances digital transformation among small and medium-sized enterprises, its impact on large enterprises remains statistically insignificant.
This research highlights the crucial role of market-based environmental regulation in driving corporate digital advancement, providing empirical evidence for policymakers to refine environmental regulation systems and implement differentiated strategies for corporate green transformation. It also offers practical insights for enterprises of varying ownership structures and sizes in pursuing digital transformation within sustainable development frameworks.