Does a coin have only two sides? -The inverted U-shaped relationship between corporate digital transformation and carbon information disclosure and its flip-flopping

Abstract

This paper examines the impact of corporate digital transformation on the disclosure of carbon information, using a sample of listed companies in China's A-shares that have published social responsibility or environmental reports from 2011 to 2020. The study finds a significant inverted U-shaped correlation between the level of corporate digital transformation and the degree of carbon information disclosure. Specifically, in the nascent phase of digital transformation, enhancing the degree of transformation can facilitate the enhancement of carbon information disclosure. However, when digital transformation goes too far, the negative effects will overweight the positive ones, and level of carbon information disclosure will be inhibited. The analysis indicates that a high level of persistent green innovation capability can positively moderate the effect of corporate digitization on carbon information disclosure. That is to say, a strong persistent green innovation capability can reinforce the beneficial impact of digitization on the level of carbon information disclosure. When the persistent capability for green innovation improves and surpasses a certain threshold, it can convert the right side of the inverted U-shaped curve into a U-shaped curve. This allows for persistent improvement in the level of carbon information disclosure through further digital transformation. Further analysis indicates that enhancing internal control levels and knowledge integration capabilities can also postpone the occurrence of the inflection point on the inverted U-shaped curve.