How Does Digital Technology Innovation Quality Empower Corporate ESG Performance? The Roles of Digital Transformation and Digital Technology Diffusion

As pivotal actors in market economies, corporations are strategically positioned to enhance environmental, social, and governance (ESG) performance to advance sustainable development. The digital technology revolution has stimulated scholarly inquiry into the influence of digital technology innovation on corporate ESG performance. Nevertheless, critical questions remain unresolved regarding the multidimensional measurement of digital technology innovation quality (DTIQ) and its mechanism paths empowering ESG enhancement. Using panel data for China’s listed companies from 2012 to 2022, this study quantifies DTIQ through its depth (technology specialization) and breadth (technology diversification), empirically investigating their impacts on ESG performance and focusing on the mediating effects of digital transformation and digital technology diffusion. Empirical results reveal that both the breadth and depth of DTIQ have significantly positive impacts on ESG performance. Mechanisms analysis identifies two ways to reinforce their positive impacts: advancing corporate digital transformation and facilitating digital technology diffusion. Discussions on the heterogeneity of the effects demonstrate that in regions with strong intellectual property protection, Eastern regions, high-tech and heavily polluting industries, and among non-SOEs and large firms, the impact of DTIQ on corporate ESG performance is more pronounced. This research expands the literature on the relationship between digital technology innovation and corporate ESG performance.