Digitalization drives sustainability: the digitalization of government environmental regulation and corporate environmental investment

This study investigates whether the digitalization of government environmental regulation is associated with corporate environmental investment. Using the staggered establishment of provincial-level Ecological and Environmental Supervision Big Data Platforms (EESBDPs) in China, we employ a multiperiod difference-in-differences (DID) design to examine changes in firms' environmental investment after these platforms are established. We find that firms in provinces that establish EESBDPs exhibit higher environmental investment. Mechanism analyses indicate that this digitalization enhances firms' environmental risk perception, government green subsidies, and firms' environmental management awareness. The association is stronger among private firms, those in more pollution-intensive industries, those in less-developed regions, and those in noncapital cities. These findings highlight the role of digitalization in reshaping the enforcement of government environmental regulation and provide new insights into how digital regulatory infrastructures are associated with firm-level environmental responses.