Technology Dividend or Governance Black Box? Digital Transformation and ESG Performance in Chinese Energy Firms (Journal of Applied Economics and Policy Studies)

Summary

• The study uses 610 firm-year observations on 122 Chinese listed energy firms over 2020–2024.p.1
• Digital transformation is positively associated with ESG performance in the controlled specification (coefficient 0.138, t = 2.32).p.1
• Internal control quality carries a significant indirect effect of 0.035 (95% CI [0.008, 0.063]) while the direct effect becomes insignificant.p.1
• Government subsidies strengthen the association (interaction coefficient 0.0452, t = 2.34).p.1
• The coefficient is 0.686 in gas production and supply but only 0.029 in power and heat generation.p.11
• With firm fixed effects the coefficient falls to 0.0106 and loses significance, so findings support a conditional association rather than a causal effect.p.14

Key insights

1. The mean ESG score is 3.526 with a standard deviation of 1.331.p.7
2. ESG performance is measured by the Huazheng ESG rating converted from nine grades to scores from 1 to 9.p.6
3. The unadjusted baseline coefficient for digital transformation is 0.119 (t = 1.987, p = 0.047).p.8
4. The direct effect of digitalisation falls from a total effect of 0.123 to 0.088 and loses significance once internal control is included.p.9
5. Each additional RMB 100 million of subsidy raises the ESG score by 0.121 points.p.10
6. The gas production and supply subsample has a coefficient of 0.686, against 0.029 in power and heat generation.p.11
7. The sample covers only five years, which limits the assessment of lag structure and parallel trends.p.15