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Digital Transformation, Intelligent Device Utilization, and Carbon Emission Reduction

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Chu, Yuzhou, Mingwang Cheng, Xiyao Zhao, and Di Zhou. 2023. “Digital Transformation, Intelligent Device Utilization, and Carbon Emission Reduction.” SSRN Scholarly Paper. Rochester, NY: Social Science Reseach Network (SSRN).

In the context of China's rapidly growing digital economy, exploring the potential to reduce carbon emissions from the perspective of enterprise digitization is of vital practical significance for achieving ambitious "carbon peak" and "carbon neutrality" goals. This paper uses data from A-share listed companies as a sample pool spanning the years 2014 to 2020 and finds that a nonlinear, inverted U-shaped relationship exists between enterprise digital transformation and carbon emissions. We further construct several robustness tests and show that the effect remains significant after accounting for the endogeneity issue using IV regressions. Heterogeneity analysis indicates that the effect of digital transformation on carbon emissions is influenced by the regional economic development level and the ownership structure of enterprises. Notably, in non-state-owned enterprises and economically advanced regions, the influence of digital transformation on carbon emissions becomes more pronounced. This paper provides explicit policy implications. It is suggested that enterprises accelerate their digital transformation by integrating smart device development into their production and operations and government should give support to digital transformation to facilitate industrial upgrading, and further promote China's pursuit of high-quality and sustainable economic development.

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