Does Digital Government Transformation Inhibit Corporate Environmental Violations? Evidence From the Big Data Bureau in China

Abstract

Digital government transformation (DGT) is a major reform toward modernized governance. It provides a new pattern to manage environmental pollution and promote sustainable development goals. Thus, in this study, a quasi-natural experiment using the Big Data Bureau (BDB) of China is conducted to investigate the impact of DGT on corporate environmental violation (CEV) via a multiperiod difference-in-differences model. DGT is found to inhibit CEV. The pressure from government environmental regulation and public environmental scrutiny play important roles as mechanisms of the effect. In addition, the impact of DGT on firms exhibits heterogeneity under different conditions. The environmental effect of DGT is stronger in BDBs for e-administrative services than BDBs for industrial development, and DGT works better at inhibiting CEV for state-owned enterprises and firms in regions with high digitalization. However, the effect of DGT is not significant for firms in heavily polluting industries. This article enriches the research on the environmental effect of DGT by providing an empirical investigation of the impact of DGT on CEV. It helps to provide insights for developing countries as to how they can leverage strengths of government reforms to promote the construction of a collaborative environmental governance system and improve their sustainable development.

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