Digital Technology for Good: Path and Influence—Based on the Study of ESG Performance of Listed Companies in China
Round 1
Reviewer 1 Report
I believe that the article titled "'Whether digital technology can be inclined to charity ' : the impact of digital transformation on ESG performance" is written in exhaustive detail to make readers understand the process carried out to achieve the proposed objective.
I only have 3 observations that would provide a better read:
1. The abstract does not present the research design or, in other words, the method/methodology used to achieve the development of the proposal. That must be there.
2. In the Data Sources section it is not clear how many companies were included in the analysis, and the selection characteristics of these companies are described much later.
In table 1. It is important to explain the meaning of each variable as it is done with the "Bloomberg ESG Disclosure Index". Because although you have the mean, the median and other measurements, it is not clear to know their meaning or intention when being measured; in other words, the "what for".
In table 2, what does the N mean? The population or sample of the number of companies or surveys carried out. This explanation should be done in the Descriptive Analysis section.
3. The authors propose three hypotheses. Although throughout the statistical analysis they try to demonstrate each one of them, the reading becomes heavy, since the reader must deduce on their own how the authors demonstrate the thesis each one of them. In other words, the reader must make a considerable effort to figure out for himself how the inputs of the analysis come to prove those hypotheses. This observation is important to take into account because it is the basis for the demonstration and development of the proposal. The authors could introduce section 4, describing how the statistical analysis display demonstrates each hypothesis.
Author Response
Cover Letter
Thank you for giving us the opportunity to submit a revised draft of the manuscript “'Whether Digital Technology can be inclined to Charity': the Impact of Digital Transformation on ESG Performance” for publication in the Journal of Applied Sciences. We appreciate the time and effort that you and the reviewers dedicated to providing feedback on our manuscript and are grateful for the insightful comments on and valuable improvements to our paper. We have incorporated most of the suggestions made by the reviewers. Those changes are highlighted in the manuscript. Please see below, for a point-by-point response to the reviewers’comments and concerns. All page numbers refer to the revised manuscript file with tracked changes.
Response 1 :” The abstract does not present the research design or, in other words, the method / methodology used to achieve the development of the proposal. That must be there.” This article fully accepts the reviewer 's comments and adds relevant missing parts. The red part is the modification part. As follows :
Abstract: The relationship between digital technology and enterprise management is becoming increasingly close. Whether the application of new digital technology can guide enterprises and even social economy to good governance is an urgent problem to be solved. This paper selects the data of listed companies from 2011 to 2020 as a sample to empirically test the impact of digital transformation on ESG performance. The methodology is as follows:(1) Using the least squares method to do the main regression test. (2)Using Heckman Two-Step Method, Lag 1 and 2, Instrumental Variable Method: Two-Stage Regression, PSM-OLS and PSM-DID Estimation, Robust Analysis to do Endogenous Treatment to ensure that the main regression test is persuasive.(3) Using mediating effect to test the mechanism of action.(4) Using the least squares method for further research .The results show that: (1) Digital transformation is conducive to ESG performance. (2) In industries with high monopoly, digital transformation is not conducive to ESG performance. (3) Further analysis shows that due to the influence of peer effect, the concept of technological goodness is transmitted through network relationships to support other enterprises in the market. This study provides a new perspective for studying the influencing factors of enterprise ESG performance, and also provides a theoretical reference for enterprises to use digital technology to achieve good governance. The scope of our research, the purpose of which is to help enterprise manipulate technology better, focuses on the effect on enterprise brought by digital technology .
Response 2 :”In the Data Sources section it is not clear how many companies were included in the analysis, and the selection characteristics of these companies are described much later. In table 1. It is important to explain the meaning of each variable as it is done with the "Bloomberg ESG Disclosure Index". Because although you have the mean, the median and other measurements, it is not clear to know their meaning or intention when being measured; in other words, the "what for".In table 2, what does the N mean? The population or sample of the number of companies or surveys carried out. This explanation should be done in the Descriptive Analysis section.” This article fully accepts the reviewer 's comments and adds relevant missing parts. The red part is the modification part. As follows :
- The number of research samples:9767,which has been added in 3.1 of our paper. Based on the general style selection of empirical research, this paper describes the characteristics of selected enterprises in table1.
- explain the meaning of each variable as it is done
To ensure research accuracy, this article controls for other factors that may affect the performance of an enterprise ESG. Including company scale (Size),which is measured through the company’s natural logarithm of year-end total assets; asset-liability ratio (Lev), which is measured through the company’s Year-end total liabilities / year-end total assets; operating income growth rate, which is measured through the company’s Operating income of this year / operating income of the previous year-1; book-to-market ratio, which is measured through the company’s Total year-end assets / market value; return on total assets (roa), which is measured through the company’s net profit / average balance of total assets; shareholding ratio of the largest shareholder (fsh1), which is measured through the company’s proportion of the largest shareholder ;proportion of independent directors (Dlzb), which is measured through the company’s number of independent directors / Board of Directors; whether it is the ’Big Four’ audit (Big4), the measurement of which is special and it means when the company is audited by the Four Accounting Firms(DTT, E&Y, PWC, KPMG),the value takes 1 otherwise 0; listing years (Lnage), industry and year and other factors. The purpose of setting control variables is to avoid the influence of missing variable errors.
- what does the N mean?
N means the number of samples. We add it to the last part of 5.1
Response 3:” The authors propose three hypotheses. Although throughout the statistical analysis they try to demonstrate each one of them, the reading becomes heavy, since the reader must deduce on their own how the authors demonstrate the thesis each one of them. In other words, the reader must make a considerable effort to figure out for himself how the inputs of the analysis come to prove those hypotheses. This observation is important to take into account because it is the basis for the demonstration and development of the proposal. The authors could introduce section 4, describing how the statistical analysis display demonstrates each hypothesis.” This article fully accepts the reviewer 's comments and adds relevant missing parts. The red part is the modification part. As follows :
According to the requirements of Reviewer 1, this paper adds section4 to explain the relationship between theory and data analysis.
Three hypotheses are proposed in this paper : H1 : Digital transformation is induced to ESG performance ; H2 : in industries with high monopoly degree, digital transformation is not monopolized to ESG performance ; H3 : under the same industry, the same region or common institutional investors, technology has spillover effect. In order to test these three hypotheses, this paper adopts the most commonly used method in the field of economic management research : using econometric theory to construct OLS model. The method of testing the coefficients of the variables constructed in this paper to determine their quantitative relationship is analyzed to provide data support for the three hypotheses. H2 and H3 are proposed on the basis of H1. The purpose is to reveal the heterogeneous impact of digital transformation on enterprise ESG performance more comprehensively, so as to provide theoretical guidance for enterprises to make better use of digital technology to improve ESG performance and for the government to formulate relevant policies.
Taking the test of H1 as an example, according to the OLS model designed in this paper, the data is input in the STATA software, and the code is written according to the model to perform the regression operation. In order to ensure that the results will not be occasional errors due to the selection of OLS methods, this paper further implements the other five OLS regression methods to ensure that the results are general conclusions, which solves the problem of reliability of regression results at the technical level. Furthermore, at the data level, this paper continues to write the programs of Heckman Two-Step Method, Lag 1 and 2, Instrumental Variable Method : Two-Stage Regression, PSM-OLS and PSM-DID Estimation in STATA software. At the same time, seven popular robustness tests are used to perform regression on the data cleaned according to the corresponding methods. The results of the main regression did not receive the impact of the problem from the data level. Therefore, the regression results ensure that the hypothesis derived from the theoretical logic is also valid in practice. It should be noted that data analysis tests not the logical deduction itself but the result of logical deduction.
According to the reviewer’s comments, we have revised the manuscript extensively. If there are any other modifications we could make, we would like very much to modify them and we really appreciate your help. We hope that our manuscript could be considered for publication in your journal. Thank you very much for your help.
Reviewer 2 Report
Title: 'Whether Digital Technology can be inclined to Charity; the Impact of Digital Transformation on ESG Performance
Dear authors and editor,
This article focuses on the relationship of digital transformation and ESG performance. First of all the paper needs a language editing from a professional copy editor. It is really hard to follow the paper theme.
Starting from the title, it is not representative to the main contents of the study.
Abstract
The abstract is relatively brief—a good informative abstract acts as a surrogate for the work itself. The researcher presents and explains the paper's main arguments, significant results, and evidence. An informative abstract includes the information found in a descriptive abstract [purpose, methods, scope]. However, it also consists of a judgment or comment about the study’s validity, reliability, or completeness, the results and conclusions of the research, and the author’s recommendations.
Right now, the abstract is dry and does not depict the true picture of the study.
In the introduction section, the Contribution of the study is not clear. Please clarify your research questions, objectives, background motivation, theoretical and empirical motivation and the lines of contributions to the literature. You can do this by sharply articulating your research questions/objectives, identify the potential theoretical, background and theoretical motivation or gaps, and explain how your study contributes to the literature. You can do this by highlighting the weaknesses of prior studies as well. Currently, your introduction is very dry. Additionally, you need state clearly the contributions of the paper. For example, "Consequently, the current paper seeks to make the following contributions to the existing literature. First,…, Second,…., Third, …, Fourth,… and so on". The description of the contribution needs to be more forensic, needs to be more focussed
The hypothesis section is weak.
What is the underlying theory that leads to the development of the hypotheses? The authors need to enhance their hypotheses development by: (i) drawing on the theory; (ii) empirical literature; (iii) research setting/contextual insights; and (iv) then setting up their hypotheses. They will do this for each hypothesis. Currently, They have not developed your hypotheses in this way. They will need to so by drawing on both seminal (old) and recently (newly) published studies (2022-2023). Consider following: https://doi.org/10.1007/s11356-023-25345-6
https://doi.org/10.1016/j.bir.2022.10.012
Methodology section well explained.
The authors need to link their findings more strongly to the: (i) theory, (ii) empirics, (iii) context; and (iv) highlight their economic, academic/research and policy implications. In the discussion of the results please focus on the novel findings and insights vis-à-vis the existing literature.
In conclusion: Summarize your thoughts and convey the larger significance of your research. Identify and discuss how a gap in the literature has been addressed and demonstrate the importance of your ideas. Introduce possible new or expanded ways of thinking about the research problem.
Also, state the ideas for future research in the conclusion. Make sure you create 3 subsections in the Conclusion: 1) Theoretical implications, 2) Managerial Implications, and 3) Ideas for Future Research.
Author Response
Cover Letter
Thank you for giving us the opportunity to submit a revised draft of the manuscript “'Whether Digital Technology can be inclined to Charity': the Impact of Digital Transformation on ESG Performance” for publication in the Journal of Applied Sciences. We appreciate the time and effort that you and the reviewers dedicated to providing feedback on our manuscript and are grateful for the insightful comments on and valuable improvements to our paper. We have incorporated most of the suggestions made by the reviewers. Those changes are highlighted in the manuscript. Please see below, for a point-by-point response to the reviewers’comments and concerns. All page numbers refer to the revised manuscript file with tracked changes.
Response 1 :” Starting from the title, it is not representative to the main contents of the study.” This article fully accepts the reviewer 's comments and adds relevant missing parts. The red part is the modification part. As follows :
Replace the title with : ' Digital Technology for Good : Path and Influence
-Based on the study of ESG performance of listed companies in China '
Response 2:” The abstract is relatively brief—a good informative abstract acts as a surrogate for the work itself. The researcher presents and explains the paper's main arguments, significant results, and evidence. An informative abstract includes the information found in a descriptive abstract [purpose, methods, scope]. However, it also consists of a judgment or comment about the study’s validity, reliability, or completeness, the results and conclusions of the research, and the author’s recommendations.” This article fully accepts the reviewer 's comments and adds relevant missing parts. The red part is the modification part. As follows :
Abstract: The relationship between digital technology and enterprise management is becoming increasingly close. Whether the application of new digital technology can guide enterprises and even social economy to good governance is an urgent problem to be solved. This paper selects the data of listed companies from 2011 to 2020 as a sample to empirically test the impact of digital transformation on ESG performance. The methodology is as follows:(1) Using the least squares method to do the main regression test. (2)Using Heckman Two-Step Method, Lag 1 and 2, Instrumental Variable Method: Two-Stage Regression, PSM-OLS and PSM-DID Estimation, Robust Analysis to do Endogenous Treatment to ensure that the main regression test is persuasive.(3) Using mediating effect to test the mechanism of action.(4) Using the least squares method for further research .The results show that: (1) Digital transformation is conducive to ESG performance. (2) In industries with high monopoly, digital transformation is not conducive to ESG performance. (3) Further analysis shows that due to the influence of peer effect, the concept of technological goodness is transmitted through network relationships to support other enterprises in the market. This study provides a new perspective for studying the influencing factors of enterprise ESG performance, and also provides a theoretical reference for enterprises to use digital technology to achieve good governance. The scope of our research, the purpose of which is to help enterprise manipulate technology better, focuses on the effect on enterprise brought by digital technology .
Response 3:” In the introduction section, the Contribution of the study is not clear. Please clarify your research questions, objectives, background motivation, theoretical and empirical motivation and the lines of contributions to the literature. You can do this by sharply articulating your research questions/objectives, identify the potential theoretical, background and theoretical motivation or gaps, and explain how your study contributes to the literature. You can do this by highlighting the weaknesses of prior studies as well. Currently, your introduction is very dry. Additionally, you need state clearly the contributions of the paper. For example, "Consequently, the current paper seeks to make the following contributions to the existing literature. First,…, Second,…., Third, …, Fourth,… and so on". The description of the contribution needs to be more forensic, needs to be more focussed.” This article fully accepts the reviewer 's comments and adds relevant missing parts. The red part is the modification part. As follows :
In the first paragraph, we add that:
In order to explore the relationship between digital transformation and ESG to demonstrate the concept of science and technology to the good,this paper firstly introduces the current changes in the concept of enterprise evaluation and the background of the concept of ESG and the development of digital transformation. Nowadays, it is the time when the concept of ESG and digital transformation intersect. As the frontier of today 's scientific and technological development, whether its technological promotion can drive the progress of enterprise society, ESG provides a proper observation window. The concept of Science and Technology for Goodness believes that science and technology promote the development of human society in a good direction ; at the same time, the economic foundation determines the superstructure. As a micro-component of the modern economy, the relationship between the ESG performance and the degree of digital transformation of enterprises provides micro-evidence for supporting the concept of technological goodness, which is also the motivation of this paper and the purpose of this paper.
In the last paragraph, we add that:
Consequently, the current paper seeks to make the following contributions to the existing literature.: ( 1 ) It enriches the research on the influencing factors of enterprise ESG performance, and demonstrates that digital transformation is an important factor affecting enterprise ESG performance. ( 2 ) The influence mechanism is explored, and the black box of the effect of digital transformation on ESG performance is opened. Thirdly, this paper further explores the network effect of digital transformation on ESG performance of enterprises, and analyzes the effect of digital transformation on ESG performance of other enterprises in the network. ( 4 ) In practice, it provides theoretical guidance for enterprises to use digital transformation to improve their ESG performance.
Response 4:” The hypothesis section is weak.What is the underlying theory that leads to the development of the hypotheses? The authors need to enhance their hypotheses development by: (i) drawing on the theory; (ii) empirical literature; (iii) research setting/contextual insights; and (iv) then setting up their hypotheses. They will do this for each hypothesis. Currently, They have not developed your hypotheses in this way. They will need to so by drawing on both seminal (old) and recently (newly) published studies (2022-2023). Consider following: https://doi.org/10.1007/s11356-023-25345-6.” This article accepts the reviewer 's comments and adds relevant missing parts. The red part is the modification part. As follows :
Firstly, we want to explain that our hypothesis is totally developed by the way proposed by reviewer. The evidence is as follows:
In terms of long-term development eidos, the endowment effect theory of managers’ career holds that the environment in which managers are located and their specific experiences in the environment will gradually form part of managers’ endowment and ultimately affect their subjective judgment [24-25] . The long-term development eidos first needs to ensure the survival of the enterprise, and the survival of the enterprise directly depends on whether the members of the enterprise can fulfill their obligations according to the rules and regulations formulated by the senior management of the enterprise and whether the enterprise must apply for bankruptcy because of insolvency. Therefore, strengthening the internal control of enterprises and curbing the potential cost rise is the fundamental guarantee for enterprises to improve the possibility of future survival. Relevant research shows that digital transformation has an impact on managers’ business behavior, such as strengthening managers' internal control ability [26] , strengthening managers' cost adjustment ability to reduce the cost stickiness of enterprises [27]. Based on the viewpoints of the above scholars, it is not difficult to see that enterprises can significantly strengthen the management’s awareness of sustainable development through the implementation of digital transformation, and the enhancement of this eidos is bound to drive subordinate employees to pay more attention to things that are conducive to the survival of enterprises in the long run, so that the eidos of long-term development has become the consensus of the whole enterprise.
Response 5:” Methodology section well explained.The authors need to link their findings more strongly to the: (i) theory, (ii) empirics, (iii) context; and (iv) highlight their economic, academic/research and policy implications. In the discussion of the results please focus on the novel findings and insights vis-à-vis the existing literature.In conclusion: Summarize your thoughts and convey the larger significance of your research. Identify and discuss how a gap in the literature has been addressed and demonstrate the importance of your ideas. Introduce possible new or expanded ways of thinking about the research problem. Also, state the ideas for future research in the conclusion. Make sure you create 3 subsections in the Conclusion: 1) Theoretical implications, 2) Managerial Implications, and 3) Ideas for Future Research.” This article accepts the reviewer 's comments and adds relevant missing parts. The red part is the modification part. As follows :
To make our hypothesis more clearly, we add a new start:
The concept of ' science and technology for goodness ' was first proposed by Paul. Miller proposed in 2013, its core connotation is : science and technology can not only promote economic development and industrial change, but also enable society to achieve sustainable development, which is embodied in the four dimensions of long-term development, innovative development, shared development and fair development at the enterprise level. Based on the above four dimensions, this paper believes that the impact of enterprise digital transformation on enterprise ESG performance is as follows :
To make our results clearly, we modify the starting part of conclusion:
Under the wave of digital transformation, the international and domestic attention to ESG performance and its evaluation system has grown rapidly. Under this tone, this paper empirically verifies that digital transformation is positively related to ESG performance. The study found that : ( 1 ) Enterprise digital transformation can significantly improve the ESG performance of enterprises ; ( 2 ) Monopoly will distort the ' digital goodness ' effect and reduce the ESG performance of enterprises ; ( 3 ) There are four specific paths for enterprise digital transformation to affect enterprise ESG performance : reducing the myopia of enterprise managers, improving enterprise innovation ability, enhancing enterprise information transparency, and enhancing enterprise governance ability. ( 4 ) Further analysis shows that the role of digital transformation in improving ESG performance of enterprises will be transmitted outward through three ways : the same industry, the same region and common institutional investors.
To make our contribution clearly, we add that:
On the theoretical level, this paper enriches the research on the influencing factors of enterprise ESG performance, and demonstrates that digital transformation is an important factor affecting enterprise ESG performance. The influence mechanism is explored, and the black box of the effect of digital transformation on ESG performance is opened. This paper further explores the network effect of digital transformation on the ESG performance of enterprises, and analyzes the effect of digital transformation on the ESG performance of other enterprises in the network. In the field of management, this paper provides theoretical guidance for enterprises to use digital transformation to improve their ESG performance.
To provide suggestions for future research, we add that:
Firstly, this paper is a typical large sample research paradigm, which reveals the impact of the overall digital transformation of enterprises on their ESG performance in the market, which can provide a more reliable theoretical basis for policy formulation, but it can not provide detailed guidance for enterprises to implement digital transformation to improve ESG level, so it is urgent to supplement relevant case studies. Secondly, the sample sources of this paper are all Chinese enterprises, so it is impossible to provide a theoretical reference closer to the national conditions of enterprises in other countries in the world, so it is urgent to expand the sample range for research ; finally, this paper can only provide evidence for ' science and technology to be good ', which cannot be fully proved. Therefore, more evidence of social progress caused by scientific and technological progress is needed to provide more realistic basis for this theory.
According to the reviewer’s comments, we have revised the manuscript extensively. If there are any other modifications we could make, we would like very much to modify them and we really appreciate your help. We hope that our manuscript could be considered for publication in your journal. Thank you very much for your help.
Round 2
Reviewer 2 Report
The paper has been extensively revised. Thank you for incorporating suggested changes. Paper needs a thorough proofreading, still there are grammatical error.
