Millie Liew

Purpose: Drawing on the Smart Machine theory, we delve into the mechanisms underlying the relationship between digital technologies and enterprise operating, investing, and financing activities. Subsequently, we propose a holistic framework that captures how digital transformation affects enterprises in a dynamic and interconnected manner. This framework conjectures that digital transformation automates and informates business processes to deliver informational and risk management benefits, thereby leading to synergistic outcomes in enterprise activities. Design/methodology/approach: Using data from listed Chinese enterprises from 2007 to 2020, we construct a digital transformation index and explore whether and how digital transformation influences enterprise operating, investing, and financing activities. Our analyses control for enterprise-level characteristics and unobserved heterogeneity at the firm and year levels. Findings: By increasing information transparency and digitalization, digital transformation supports the accumulation of intangible intellectual capital and reduces the level of tangible assets. Then, digital transformation interacts with accumulated intellectual assets to support long-term investment growth through improved analytics and risk management. To support long-term investments, digital transformation promotes speculative financing and curbs Ponzi financing through improved forecasting and risk management. Ultimately, digital transformation improves financial and operational performance through its synergistic influence. Originality/value: We enrich prior literature by proposing a holistic framework to capture the dynamic and interconnected influence of digital transformation on enterprise activities. This framework presents a more complete picture of how digital transformation enhances information and risk management to improve enterprise performance.

With the growing regulatory interest in supply chain carbon footprint, we provide a foundation for future enquiry into the role of green supply chain management (GSCM) on carbon accounting. We conduct a systematic literature review on a final set of 113 articles published between 2010 and 2024 using the Web of Science ( WoS ) and Scopus databases. Our approach comprises a bibliometric descriptive analysis, a thematic analysis based on clusters and the theory, context, and methodology (TCM) framework. The findings highlight the evolution of the field over time, primary publication outlets and subject areas, and the geographical distribution based on author affiliations and research context. Moreover, the thematic analysis reveals the theories, industries, research designs, and dominant themes in the GSCM literature associated with carbon accounting. After a synthesis of the findings, we group prior research based on the interconnected dimensions of (1) theoretical vs. empirical, (2) green supply chain flows, and (3) the level of analysis. Finally, we construct a comprehensive future research agenda based on existing knowledge gaps identified using the structured framework. This review presents key implications for both academia and industry in advancing GSCM practices to align with evolving carbon accounting requirements.

Amid tightening environmental governance, we examine whether and how firms' ecoconsciousness leads to a harmonious balance between environmental and economic performance in the form of green revenues. We utilize China's centralization of environmental monitoring in 2015 as the basis for a difference-indifferences methodology, using highly and less eco-conscious firms as the treatment and control groups. We find that relative to less ecoconscious firms, highly eco-conscious firms derive greater green revenues post-centralization. This finding is robust to underlying firm characteristics and unobservable industry-and timespecific heterogeneity. Regional internet infrastructure development and corporate greenwashing mitigation facilitate the effect on highly eco-conscious firms' green revenues, suggesting that effective centralized monitoring relies on an integrated information transmission network and an improvement in firms' genuine environmental accountability. Overall, eco-consciousness facilitates a win-win scenario between environmental and economic performance under an increasingly strict environmental regulatory landscape.

Purpose: The objective of this study is to investigate how the implementation of an Emission Trading Scheme (ETS) influences an ETS-regulated firm’s level of earnings smoothness. Design/methodology/approach: Using a staggered difference-in-differences model based on China’s ETS pilots commencing in 2013, this study investigates how the implementation of ETS pilots affects regulated firms’ earnings smoothing relative to non-regulated firms. The sample period spans from 2008 to 2019. This model incorporates time-invariant firm-specific heterogeneity, time-specific heterogeneity, and a series of firm characteristics to establish causality. Robustness tests justify findings. Findings: The results show that after implementing an ETS pilot, regulated firms increase their earnings smoothness relative to non-regulated firms. Regulated firms strategically smooth their earnings to obtain additional financial resources and meet compliance costs arising from an ETS. Further analysis reveals that regulated firms’ earnings smoothing activity is a function of environmental regulations, managerial integrity, and capital market incentives. Originality/value: This study deviates from past research focusing on the environmental consequences of ETS by indicating that an ETS affects regulated firms’ financial reporting decisions. Specifically, regulated firms resort to earnings smoothing as a short-term exit strategy from financing concerns arising from environmental regulations. This finding expands prior literature primarily focusing on the effect of tax and financial reporting regulations on earnings smoothness. This study also indicates that firms utilize earning smoothing to lower their short-term cost of capital, which enables them to access additional financing at a lower cost and reconfigure their operations to meet stakeholder environmental demands.

Financial reporting decisions can be influenced by the distribution of executive decision-making power. We examine whether internal governance, the process through which the power to make decisions is distributed between CEOs and their subordinates, can influence the level of conservatism in such decisions. We show that firms with better internal governance are more conservative. We also find that the effect is more pronounced for firms with less powerful and older CEOs, those with subordinate executives who contribute more, and those who are more mature. We conduct various tests that confirm the robustness of our results. Unlike other studies that focus only on CEOs, we examine how the top management team as a group and the power distribution between CEOs and key subordinates shape financial reporting quality. Our study can inform various stakeholders, including firms aiming to appoint executives and strengthen their internal governance. JEL Classifications: G34; M12; M41; M50.