Despite the growing importance of digital technologies for sustainable development, little is known about how digital infrastructure affects firms’ environmental, social and governance (ESG) performance.
We exploit China’s staggered implementation of National Big Data Pilot Zones (NBDPZs) as a quasi-natural experiment to examine this relationship. Using difference-in-differences estimation with panel data from Chinese listed firms during 2012–2020, we find that NBDPZs significantly enhance firms’ ESG performance.
The effect operates through three distinct channels: enhanced environmental awareness, improved product quality and strengthened internal governance. The impact is more pronounced for firms with high investor visibility, those in financially dependent industries and those located in regions with low initial digital innovation. Beyond improving ESG metrics, NBDPZs generate substantial economic benefits in the long run.
Our findings reveal how digital infrastructure enhances corporate sustainability practices, advancing both academic understanding of digital policy effects and ESG determinants, while offering practical guidance for firms and policymakers to leverage digital infrastructure in promoting sustainable development.
