Digital Transformation as a Catalyst for Environmental Responsibility: Evidence from Pollution Expenses Reduction in Chinese Firms

This study examines how corporate digital transformation contributes to environmental responsibility by reducing pollution expenses among Chinese A-share listed firms between 2011 and 2020. We construct a firm-level digital transformation index using text analysis of annual report disclosures. The results show that digital transformation significantly lowers pollution expenses, both directly through enhanced process efficiency and indirectly by fostering innovation and easing financing constraints. These effects are stronger in firms subject to higher analyst attention and in high-tech industries. Robustness tests—including alternative measurements, Tobit models, and instrumental variable analysis—support the reliability of our findings. This research advances the literature on sustainability and corporate social responsibility by clarifying the mechanisms and conditions under which digital transformation reduces environmental costs. The findings provide practical implications for policymakers and business leaders in emerging markets seeking to align digitalization strategies with environmental objectives.