Integration of Informatization and Industrialization and Corporate ESG Performance: Evidence from a Quasi-Natural Experiment in China

Integration of informatization and industrialization (IoII) is a pivotal sustainable strategy in China, aimed at industrial modernization and high-quality economic development, which accelerates enterprise digitalization. This paper explores the economic impacts of China’s integration of informatization and industrialization (IoII) policy on enterprises’ environmental, social, and governance (ESG) performance, a core indicator of corporate sustainability. Employing the quasi-natural experiment setting offered by the pilot policy of “Integration of Informatization and Industrialization (IoII)” in China, this paper explores the effects of the IoII on corporate ESG performance through effect analysis, mechanism identification, and heterogeneity test, utilizing the data from A-share listed companies in China. Using the difference-in-differences (DID) analysis, the results suggest that the IoII significantly contributes to improving corporate ESG performance, primarily driven by improvements in the environmental (E) and governance (G) dimensions, while the social (S) dimension is not significantly affected, thereby enhancing long-term sustainability competitiveness. The findings from the mechanism identification indicate that the IoII can promote corporate ESG performance through the three mechanisms: green innovation, corporate governance, and information transparency, all of which underpin sustainable operational practices. The heterogeneity tests reveal that the IoII promotes corporate ESG performance more effectively in high-tech enterprises, non-SOEs, and enterprises with low growth rates, implying differentiated paths for sustainability-driven digital upgrading. By linking industrial digital integration with corporate sustainability, this study enriches the understanding of ESG determinants and provides meaningful implications for sustainability-oriented digital transformation.