Digital Technology and Corporate Social Responsibility: Evidence from China

While the rapid development of digital technology has attracted great attention from researchers, media, and policymakers, whether and how the adoption of digital technology shapes corporate social responsibility (CSR) remain unclear. In this study, we examine the effects of digital technologies on CSR based on listed firms in China’s stock markets from 2009 to 2019. We find that digital transformation significantly promotes CSR. This result is unchanged when we further introduce an exogenous shock, China’s 4 G-LTE policy, to identify the causality. Mechanistical analysis shows that digital technology helps companies improve pollution control capabilities and internal control efficiency, thereby improving CSR performance. Cross-sectionally, the above promotion effect is more significant in firms with low financing constraints and greater regulatory pressure. Overall, this study sheds new light on firms fulfilling their social responsibilities in the digital era.