Digitalization, ESG-Oriented Innovation, and Corporate Resilience under Environmental Policy Shocks

This study examines how digitalization affects corporate resilience under environmental policy shocks in Chinese private manufacturing firms. We test whether ESG-oriented innovation mediates this relationship. Our panel dataset covers 3,870 firm-year observations from 2013 to 2022. Results show digitalization significantly enhances corporate resilience when environmental policies tighten. ESG-oriented innovation partially mediates this effect. The positive impact is stronger in large firms, state-owned enterprises, and foreign-invested companies. These findings suggest digitalization helps firms adapt to regulatory changes through sustainable innovation pathways. Our study contributes to understanding digital transformation's role in building organizational resilience. It also reveals the mechanisms through which firms navigate environmental policy uncertainties. The research offers practical implications for corporate strategy and policy design in emerging markets.