Enterprise Digital Transformation, ESG and Financial Performance: Evidence From Chinese A-Share Listed Manufacturing Firms

Against the backdrop of global high-quality economic development and technological innovation, digital transformation, as a core driver for cultivating new quality productivity, has drawn academic and industrial attention for its potential to enhance corporate financial performance. The widespread application of digital technologies is reshaping corporate operational models, while environmental, social, and governance (ESG) concepts have increasingly become critical guidelines for corporate sustainable development. Clarifying the intrinsic relationships among these three elements is of profound significance. Using 2014 to 2023 data from A-share manufacturing listed firms in China, this study empirically examines how digital transformation impacts financial performance, focusing on ESG’s mediating role via panel data and regression models with third—party ESG ratings. Results show digital transformation significantly boosts both ESG and financial performance, with strong ESG performance driving financial growth. ESG partially mediates this relationship. Heterogeneity analysis reveals stronger mediating effects in non-state-owned, high-tech, and economically developed-region firms. This study illuminates the impact of digital transformation on financial performance and the mediating role of ESG, enriching the academic discourse on digital transformation. The findings provide critical references for corporate strategic decision-making and policy formulation, offering insights into integrating digital transformation initiatives with ESG practices to drive sustainable development.