Digital Transformation and Firm Environmental Performance: Does Managerial Overseas Experience Matter?
Abstract
Digital transformation and firm environmental performance have emerged as central topics in the field of corporate sustainability. However, few publications have explored how managerial characteristics influence this relationship. This paper aims to address this gap by examining the impact of digital transformation on firm environmental performance, with a particular focus on the moderating role of managerial overseas experience. Using a sample of Chinese listed companies from 2011 to 2021, we employ robust econometric models to analyse the effects and variations across firms. Our findings reveal that digital transformation significantly enhances firm environmental performance. This positive impact is more pronounced in non-high-pollution firms compared to high-pollution firms. Furthermore, we identify managerial overseas experience as a critical moderating factor, strengthening the positive relationship between digital transformation and firm
environmental performance. This study provides valuable insights for firms pursuing sustainable development strategies through digital transformation, emphasizing the importance of managerial overseas experience in achieving improved environmental outcomes.
Downloads
References
Doan T., Iskandar-Datta M. Are female top executives more risk-averse or more ethical? Evidence from corporate cash holdings policy. Journal of Empirical Finance. 2019;55:161–176. https://doi.org/10.1016/j.jempfin.2019.11.005 DOI: https://doi.org/10.1016/j.jempfin.2019.11.005
Bonfanti A., Mion G., Brunetti F., et al. The contribution of manufacturing companies to the achievement of sustainable development goals: An empirical analysis of the operationalization of sustainable business models. Business Strategy and the Environment. 2022;32(4):2490–2508. https://doi.org/10.1002/bse.3260 DOI: https://doi.org/10.1002/bse.3260
Pu T. Do financing constraints moderate the effect of digital transformation on corporate cash holdings? Evidence from China. Journal of Corporate Finance Research = Korporativnye finansy. 2024;18(3):49–61. https://doi.org/10.17323/j.jcfr.2073-0438.18.3.2024.49-61 DOI: https://doi.org/10.17323/j.jcfr.2073-0438.18.3.2024.49-61
Wu D., Xie Y., Lyu S. Disentangling the complex impacts of urban digital transformation and environmental pollution: Evidence from smart city pilots in China. Sustainable Cities and Society. 2022;88:104266. https://doi.org/10.1016/j.scs.2022.104266 DOI: https://doi.org/10.1016/j.scs.2022.104266
Hambrick D.C., Mason P.A. Upper echelons: the organization as a reflection of its top managers. Academy of Management Review. 1984;9(2):193–206. https://doi.org/10.5465/amr.1984.4277628 DOI: https://doi.org/10.2307/258434
Aini S.N., Harymawan I., Nasih M., et al. CEO overseas experience and sustainability report disclosure: Evidence from Indonesia. Corporate Social Responsibility and Environmental Management. 2024;31(6):5837–5849. https://doi.org/10.1002/csr.2883 DOI: https://doi.org/10.1002/csr.2883
Alkaraan F., Albitar K., Hussainey K., et al. Corporate transformation toward Industry 4.0 and financial performance: The influence of environmental, social, and governance (ESG). Technological Forecasting and Social Change. 2021;175:121423. https://doi.org/10.1016/j.techfore.2021.121423 DOI: https://doi.org/10.1016/j.techfore.2021.121423
Wernerfelt B. A resource‐based view of the firm. Strategic Management Journal. 1984;5(2):171–180. https://doi.org/10.1002/smj.4250050207 DOI: https://doi.org/10.1002/smj.4250050207
Ferreira N.C.M.Q.F., Ferreira J.J.M. The field of resource-based view research: mapping past, present and future trends. Management Decision. 2025;63(4):1124-1153 https://doi.org/10.1108/md-10-2023-1908 DOI: https://doi.org/10.1108/MD-10-2023-1908
Pu T., Zulkafli A.H. How does digital transformation affect innovation quality? E&M Ekonomie a Management. 2024;27(4):16–32. https://doi.org/10.15240/tul/001/2024-5-021 DOI: https://doi.org/10.15240/tul/001/2024-5-021
Popli M., Ahsan F.M., Mukherjee D. Upper echelons and firm internationalization: A critical review and future directions. Journal of Business Research. 2022;152:505–521. https://doi.org/10.1016/j.jbusres.2022.07.048 DOI: https://doi.org/10.1016/j.jbusres.2022.07.048
Qin J., Lin J. CEO foreign experience and corporate digital transformation: moderating effects of firm resources. Technology Analysis and Strategic Management. 2024;1–14. https://doi.org/10.1080/09537325.2024.2405982 DOI: https://doi.org/10.1080/09537325.2024.2405982
Arsecularatne B.P., Rodrigo N., Chang R. Review of Reducing Energy Consumption and Carbon Emissions through Digital Twin in Built Environment. Journal of Building Engineering. 2024;98:111150. https://doi.org/10.1016/j.jobe.2024.111150 DOI: https://doi.org/10.1016/j.jobe.2024.111150
Kurniawan T.A., Othman M.H.D., Liang X., et al. Decarbonization in waste recycling industry using digitalization to promote net-zero emissions and its implications on sustainability. Journal of Environmental Management. 2023;338:117765. https://doi.org/10.1016/j.jenvman.2023.117765 DOI: https://doi.org/10.1016/j.jenvman.2023.117765
Warner K.S.R., Wäger M. Building dynamic capabilities for digital transformation: An ongoing process of strategic renewal. Long Range Planning. 2018;52(3):326–349. https://doi.org/10.1016/j.lrp.2018.12.001 DOI: https://doi.org/10.1016/j.lrp.2018.12.001
Wang B., Lin Z., Wang M., et al. Applying blockchain technology to ensure compliance with sustainability standards in the PPE multi-tier supply chain. International Journal of Production Research. 2022;61(4):4934–4950. https://doi.org/10.1080/00207543.2022.2025944 DOI: https://doi.org/10.1080/00207543.2022.2025944
Pirzada K., Ahmed K., Moens G. Aligning Corporate Strategies with the Sustainable Development Goals. Foresight and STI Governance. 2023;17(2):5-7. https://doi.org/10.17323/2500-2597.2023.2.5.7 DOI: https://doi.org/10.17323/2500-2597.2023.2.5.7
Hambrick D.C. Upper Echelons Theory: an update. Academy of Management Review. 2007;32(2):334–343. https://doi.org/10.5465/amr.2007.24345254 DOI: https://doi.org/10.5465/amr.2007.24345254
Pu T., Zulkafli A. Global minds, local impact: Exploring the effect of foreign directors on corporate R&D expenditure. Strategic Management. 2024;30(2):33-48. https://doi.org/10.5937/straman2400007p DOI: https://doi.org/10.5937/StraMan2400007P
Yu D., Hu K., Hao Y. Can China’s leading officials’ accountability audit of natural resources policy promote corporate emissions reduction? Carbon Management. 2024;15(1): 2317282. https://doi.org/10.1080/17583004.2024.2317282 DOI: https://doi.org/10.1080/17583004.2024.2317282
Uyar A., Al‐Shaer H., Kuzey C., et al. Do foreign directors reinforce better waste management? The moderating role of eco‐innovation. Business Strategy and the Environment. 2023;33(3):2040–2065. https://doi.org/10.1002/bse.3589 DOI: https://doi.org/10.1002/bse.3589
Pu T., Zulkafli A.H. Managerial ownership and corporate innovation: evidence of patenting activity from Chinese listed manufacturing firms. Cogent Business & Management. 2024;11(1): 2289202. https://doi.org/10.1080/23311975.2023.2289202 DOI: https://doi.org/10.1080/23311975.2023.2289202
Doz Y.L., Bartlett C.A., Prahalad C.K. Global competitive pressures and host country demands managing tensions in MNCs. California Management Review. 1981;23(3):63–74. https://doi.org/10.2307/41172603 DOI: https://doi.org/10.2307/41172603
González‐Benito J., González‐Benito Ó. A study of determinant factors of stakeholder environmental pressure perceived by industrial companies. Business Strategy and the Environment. 201019(3):164–181. https://doi.org/10.1002/bse.631 DOI: https://doi.org/10.1002/bse.631
Pu T., Zulkafli A.H. State Ownership Heterogeneity and Corporate Innovation: New Evidence from a Hierarchical Perspective. Journal of Corporate Finance Research = Korporativnye finansy. 2024;18(1):20–36. (In Russ.) https://doi.org/10.17323/j.jcfr.2073-0438.18.1.2024.20-36 DOI: https://doi.org/10.17323/j.jcfr.2073-0438.18.1.2024.20-36
Teece D.J. Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal. 2007;28(13):1319–1350. https://doi.org/10.1002/smj.640 DOI: https://doi.org/10.1002/smj.640
Doan T.N., Vu C.T.K. Managerial practices and firms’ environmental performance: An international evidence. Corporate Social Responsibility and Environmental Management. 2024;31(6):6083–6102. https://doi.org/10.1002/csr.2910 DOI: https://doi.org/10.1002/csr.2910
Varadarajan R. Resource advantage theory, resource based theory, and theory of multimarket competition: Does multimarket rivalry restrain firms from leveraging resource Advantages? Journal of Business Research. 2023;160:113713. https://doi.org/10.1016/j.jbusres.2023.113713 DOI: https://doi.org/10.1016/j.jbusres.2023.113713
Zhang W., Zhao J. Digital transformation, environmental disclosure, and environmental performance: An examination based on listed companies in heavy-pollution industries in China. International Review of Economics & Finance. 2023;87:505–518. https://doi.org/10.1016/j.iref.2023.06.001 DOI: https://doi.org/10.1016/j.iref.2023.06.001
Maiurova A., Kurniawan T.A., Kustikova M., et al. Promoting digital transformation in waste collection service and waste recycling in Moscow (Russia): Applying a circular economy paradigm to mitigate climate change impacts on the environment. Journal of Cleaner Production. 2022;354:131604. https://doi.org/10.1016/j.jclepro.2022.131604 DOI: https://doi.org/10.1016/j.jclepro.2022.131604
Xiao D., Xu J., Li Q. The “Double-Edged Sword” effect of air quality information disclosure policy—Empirical evidence based on the digital transformation of Chinese listed companies. Energy Economics. 2024;133:107513. https://doi.org/10.1016/j.eneco.2024.107513 DOI: https://doi.org/10.1016/j.eneco.2024.107513
Liu B. Total environmental target constraints and border air pollution effects: deterioration or alleviation? Kybernetes. 2024;ahead-of-print. https://doi.org/10.1108/k-08-2024-2189 DOI: https://doi.org/10.1108/K-08-2024-2189
Kamasak R. The contribution of tangible and intangible resources, and capabilities to a firm’s profitability and market performance. European Journal of Management and Business Economics. 2017;26(2):252–275. https://doi.org/10.1108/ejmbe-07-2017-015 DOI: https://doi.org/10.1108/EJMBE-07-2017-015
Qiu Y., Shaukat A., Tharyan R. Environmental and social disclosures: Link with corporate financial performance. The British Accounting Review. 2014;48(1):102–116. https://doi.org/10.1016/j.bar.2014.10.007 DOI: https://doi.org/10.1016/j.bar.2014.10.007
Bellamy M.A., Dhanorkar S., Subramanian R. Administrative environmental innovations, supply network structure, and environmental disclosure. Journal of Operations Management. 2020;66(7-8):895–932. https://doi.org/10.1002/joom.1114 DOI: https://doi.org/10.1002/joom.1114
Bendig D., Schulz C., Theis L., et al. Digital orientation and environmental performance in times of technological change. Technological Forecasting and Social Change. 2023;188:122272. https://doi.org/10.1016/j.techfore.2022.122272 DOI: https://doi.org/10.1016/j.techfore.2022.122272
Xu Q., Li X., Guo F. Digital transformation and environmental performance: Evidence from Chinese resource‐based enterprises. Corporate Social Responsibility and Environmental Management. 2023;30(4):1816–1840. https://doi.org/10.1002/csr.2457 DOI: https://doi.org/10.1002/csr.2457
Mady K., Battour M., Aboelmaged M., et al. Linking internal environmental capabilities to sustainable competitive advantage in manufacturing SMEs: The mediating role of eco-innovation. Journal of Cleaner Production. 2023;417:137928. https://doi.org/10.1016/j.jclepro.2023.137928 DOI: https://doi.org/10.1016/j.jclepro.2023.137928
Zhu D., Chen K., Sun C., et al. Does environmental pollution liability insurance promote environmental performance? Firm-level evidence from quasi-natural experiment in China. Energy Economics. 2023;118:106493. https://doi.org/10.1016/j.eneco.2022.106493 DOI: https://doi.org/10.1016/j.eneco.2022.106493
Guo X., Li M., Wang Y., et al. Does digital transformation improve the firm’s performance? From the perspective of digitalization paradox and managerial myopia. Journal of Business Research. 2023;163:113868. https://doi.org/10.1016/j.jbusres.2023.113868 DOI: https://doi.org/10.1016/j.jbusres.2023.113868
Yang Y., Han J. Digital transformation, financing constraints, and corporate environmental, social, and governance performance. Corporate Social Responsibility and Environmental Management. 2023;30(6):3189–3202. https://doi.org/10.1002/csr.2546 DOI: https://doi.org/10.1002/csr.2546
Pu T. Does digital transformation propel innovation strategies? An empirical investigation based on machine learning and the dynamic GMM approach. E&M Economics and Management. 2025;28(2):81-96. https://doi.org/10.15240/tul/001/2025-5-012 DOI: https://doi.org/10.15240/tul/001/2025-5-012
Zhang W., Xu N., Li C., et al. Impact of digital input on enterprise green productivity: Micro evidence from the Chinese manufacturing industry. Journal of Cleaner Production. 2023;414:137272. https://doi.org/10.1016/j.jclepro.2023.137272 DOI: https://doi.org/10.1016/j.jclepro.2023.137272
Firoozi A.A., Tshambane M., Firoozi A.A., et al. Strategic Load Management: Enhancing Eco-Efficiency in mining operations through automated technologies. Results in Engineering. 2024;24:102890. https://doi.org/10.1016/j.rineng.2024.102890 DOI: https://doi.org/10.1016/j.rineng.2024.102890
Su J., Wei Y., Wang S., et al. The impact of digital transformation on the total factor productivity of heavily polluting enterprises. Scientific Reports. 2023;13:6386. https://doi.org/10.1038/s41598-023-33553-w DOI: https://doi.org/10.1038/s41598-023-33553-w
Copyright (c) 2025 National Research University Higher School of Economics

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.