Corporate digital transformation improves carbon performance through green innovation and total factor productivity under varying financial conditions

Against the background of low-carbon transition and increasing climate governance pressure, digital transformation (DT) has become an important way for firms to improve environmental performance and support green development. Using panel data from Chinese A-share listed firms from 2012 to 2023, this study examines whether and how corporate DT improves carbon performance (CP) and how financial conditions shape this effect. The results show that DT has a positive and statistically significant effect on CP. This finding remains robust after a series of robustness checks and endogeneity tests. Mechanism analysis indicates that DT improves CP by promoting green innovation (GI) and enhancing total factor productivity (TFP). Moderation analysis further shows that the firm-level green credit ratio strengthens the positive effect of DT on CP, whereas financing constraints weaken it. Heterogeneity analysis reveals that the effect is more evident among non-state-owned enterprises and large firms, while it remains broadly observed across different sectors and pollution intensities. By jointly examining transmission mechanisms and financial boundary conditions, this study provides firm-level evidence on how DT improves CP and offers implications for coordinating digital upgrading, green finance, and corporate low-carbon transition.