Does Digital Asset Allocation Improve Corporate ESG Performance? Evidence from China

Against the backdrop of the deep integration of the “Dual Carbon” goals and the digital economy, whether digital asset allocation can improve corporate Environmental, Social, and Governance (ESG) performance has become an important topic of academic concern. Taking all Chinese A-share listed firms from 2013 to 2024 as the research population, this study obtains a final panel sample of 29,329 firm-year observations after excluding financial and insurance firms, ST/*ST firms, newly listed firms, and observations with missing key variables. Digital asset allocation is measured by the proportion of digital technology-related intangible assets to total intangible assets. The study employs a two-way fixed-effects panel model, firm-clustered robust standard errors, IV-2SLS estimation, robustness tests based on alternative measurements and sample restrictions, and Bootstrap sequential mediation analysis. The findings reveal that digital asset allocation significantly enhances corporate ESG performance. Mechanism tests indicate that digital asset allocation improves corporate ESG performance through internal control quality, green technological innovation, and the sequential pathway from internal control quality to green technological innovation. Further moderation analysis shows that the promotion effect is more pronounced in heavily polluting industries, while heterogeneity analysis indicates stronger effects among firms in the growth and decline stages, non-state-owned enterprises, and firms with lower financing constraints. This study provides empirical evidence and policy implications for optimizing corporate digital resource allocation, improving internal governance mechanisms, and advancing classified ESG.