Role of digital finance in driving corporate environmental performance

This research examines whether and how digital finance influences a firm’s environmental performance. It utilises the digital finance index and a sample of Chinese-listed firms from 2011 to 2023. Results indicate the positive link between digital finance and corporate environmental performance. Additionally, financing constraints and production efficiency are investigated, as they are crucial channels that reveal the link between digital finance and corporate environmental performance. Further analysis shows that digital finance promotes corporate R&D expenditure, equipment investment, and green technological innovation capabilities, thereby contributing to improved environmental protection. Consistency of findings remains with alternative proxies of digital finance and corporate environmental performance, econometric methods, and endogeneity problems.