IMPACT OF DIGITAL FINANCE ON CORPORATE SUSTAINABILITY

Abstract

This study investigates the impact of digital finance on corporate sustainable development using panel data from Chinese A-share listed firms between 2011 and 2022. By constructing a multi-dimensional digital finance index and employing fixed-effect and instrumental variable regression models, the analysis reveals that digital finance significantly promotes firms’ sustainable growth. Among the sub-dimensions, the depth of use exerts the strongest effect. Further, total factor productivity mediates the relationship between digital finance and sustainability, while financial risk also plays a partial mediating role. Heterogeneity analysis indicates that the positive impact of digital finance is more pronounced in private enterprises, medium-sized firms, service industries, and western regions. These findings underscore the vital role of digital financial infrastructure in enhancing corporate sustainability and suggest that targeted financial innovation policies can foster more inclusive and balanced economic development. The study contributes to the literature by clarifying the mechanisms and boundary conditions through which digital finance affects sustainable business transformation.