How does digital industry clustering shape enterprise ESG performance: evidence from China’s four major urban agglomerations

Digital industry clustering (DIC) worldwide is profoundly reshaping corporate environmental, social, and governance (ESG) performance, yet its underlying mechanisms remain unclear. Using panel data from 994 Chinese listed firms across four major urban agglomerations during 2013–2022, this study examines the effects and mechanisms of DIC on ESG performance. Results reveal that: (1) digital industries increasingly concentrate in metropolitan cores, with mild polycentric differentiation in the Yangtze River Delta; (2) DIC significantly improves ESG performance, with the strongest effect in the Pearl River Delta and the weakest in the Yangtze River Delta; (3) the effect is more pronounced in high-tech regions and industries, state-owned and larger firms, and firms with stronger market positions and higher customer concentration; and (4) environmental subsidies, technological talent, and internal control quality emerge as potential mechanisms, with regional variations. These findings provide insights into leveraging DIC to improve corporate ESG performance across regions.