Data elements, policy innovation, and corporate ESG: Insights from China's national big data comprehensive pilot zones

The National Big Data Comprehensive Pilot Zone policy, launched by the Chinese government in 2015, serves as a key institutional effort to transform data into a productive factor. While existing literature extensively examines how the digital economy and digital technologies influence corporate ESG performance, it largely overlooks the specific role of data as a production factor in ESG practices. This study addresses that gap by assessing the impact of data elements on firms' ESG performance, using the 2015 policy as a quasi-natural experiment. Leveraging panel data from A-share listed firms in China from 2009 to 2022 and applying a difference-in-differences (DID) approach, the analysis finds that data elements significantly improve ESG performance. Mechanism analysis identifies green innovation, pay gap reduction, labor reallocation, improved disclosure, and enhanced managerial capacity as key transmission channels. This study further finds heterogeneity in data elements' impact on firms' ESG performance across firm, industry, and regional levels. Drawing on China's practical experience, this study offers guidance for international ESG policymakers in designing inclusive, adaptive, and collaborative cross-regional ESG data governance frameworks.