Digital Technology and Corporate Social Responsibility: Evidence from China

ABSTRACT

While the rapid development of digital technology has attracted great attention from researchers, media, and policymakers, whether and how the adoption of digital technology shapes corporate social responsibility (CSR) remain unclear. In this study, we examine the effects of digital technologies on CSR based on listed firms in China’s stock markets from 2009 to 2019. We find that digital transformation significantly promotes CSR. This result is unchanged when we further introduce an exogenous shock, China’s 4 G-LTE policy, to identify the causality. Mechanistical analysis shows that digital technology helps companies improve pollution control capabilities and internal control efficiency, thereby improving CSR performance. Cross-sectionally, the above promotion effect is more significant in firms with low financing constraints and greater regulatory pressure. Overall, this study sheds new light on firms fulfilling their social responsibilities in the digital era.

KEYWORDS:

• Digital transformation
• corporate social responsibility
• 4G-LTE policy
• environment protection

JEL:

• G34
• M14

Acknowledgments

We thank seminar participants at Fudan University, Huazhong University of Science and Technology for helpful suggestions.

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Notes

1. For example, many countries have introduced or updated AI strategies and continued to increase R&D investment. In March 2021, the National AI Security Council of the United States released the Final Recommendation Report of the National Security Council on AI. In May 2021, the Russian government passed two government resolutions to support AI development, including subsidies for AI projects. In June 2021, the Australian government released the “AI Action Plan.” In June 2021, the Cabinet Office of Japan proposed a draft of the “AI Strategy 2021,” aimed at building a “super-intelligent society 5.0.” In December 2021, the French government issued a new plan for the “AI National Strategy,” which will invest 2.2 billion euros in the next five years to accelerate the development of AI.

2. For example, the rising concept of “Corporate Digital Responsibility (CDR)” also implies that the value creation of enterprise digitalization should not only be reflected in the creation of economic value but also include social value and environmental value (please refer to Figure A1 in Appendix). It is also proposed and explained in detail by Lobschat et al. (2021) in their research. Broekhuizen et al. (2021)suggests that the analysis of how digital change affects business responses and outcomes needs to be based on a more holistic, multi-disciplinary, and multi-stakeholder perspective. Organizations are well advised not to disregard people orientation when going digital (Weber, Büttgen, and Bartsch 2022).

3. More than 20 provinces and cities in China have put forward target plans for developing the digital economy and accelerating digital transformation.

Additional information

Funding

We also gratefully acknowledge the financial support from the Major Project of National Social Science Foundation of China [grant no. 21ZDA010], the National Natural Science Foundation of China [grant no. 71772178]. All errors are our own.